The Thai economy may have already seen the nadir of its potential growth rate, suggesting that the recovery is gaining speed, says Finance Minister Apisak Tantivorawong.
Apisak: Forecast for 2017 right on track
Although the full-year economic reading is not yet available, the 4% GDP growth for 2017 forecast by the Fiscal Policy Office (FPO) is likely close to the real figure, Mr Apisak said.
His comment is based on the FPO's economic growth estimates of 4% last year and 4.2% this year. The National Economic and Social Development Board is due to announce the official 2017 GDP data on Feb 19. GDP in the third quarter grew at its fastest pace since the first quarter of 2013, pushing economic growth to 3.8% year-on-year for the nine months to September.
Should the FPO's forecast of 4.2% GDP growth in 2018 take hold, it would be the strongest growth tally since 2012.
Thailand's economy grew a mere 0.1% in 2011 when it was hit by devastating floods. The second-largest economy in Southeast Asia gained 6.5% in 2012 because of a low-base effect and massive spending on flood restoration, then 2.9% in 2013 as the political stalemate took a toll, 0.8% in 2014, 2.8% in 2015 and 3.2% in 2016.
With the brighter economic outlook, the Bank of Thailand recently hinted that it might upgrade its GDP growth forecast of 3.9% for 2018 in light of the larger boost expected from state investment.
Mr Apisak said the government has launched a batch of economic stimulus measures to keep the growth momentum going.
Government spending for fiscal 2018 is on a par with last fiscal year, with both years featuring supplementary budgets, he said. The government set its investment budget at 20% of annual expenditure, a level seen as stimulative.
The government plans to compile a supplementary budget of 150 billion baht for this year, a move that would require additional borrowing of 100 billion, bringing the fiscal 2018 budget deficit to 550 billion baht.
That would mean hitting the 20% ceiling of annual and additional budget expenditure, plus 80% of the budget for debt principal repayment set by law, resulting in the largest deficit since the regime took power in 2014.
