Posted on 24 Feb 2009
Economic growth should stay positive in 2009 thanks to a rebound in the second half, according to Prime Minister Abhisit Vejjajiva.
He projected modest growth of zero to 0.5% for
"I admit that the current situation is rather bad and that the figures coming out are fluctuating. I expect first quarter figures changed little from those late last year," Mr Abhisit told foreign business leaders at a lunch organised by the Joint Foreign Chambers of Commerce of Thailand.
"But the second quarter, while still negative, should be better [than the first], and positive growth will be seen in the second half."
The National Economic and Social Development Board reported yesterday the economy contracted by 4.6% year-on-year in the fourth quarter of 2008, the worst quarterly performance for the Thai economy since the 1997 crisis.
But Mr Abhisit said he was confident that the government's economic stimulus measures would help boost domestic demand and purchasing power.
Yet foreign business leaders were more pessimistic. Nandor von der Luehe, the JFCCT chairman, said to hope for positive growth this year was overoptimistic.
"I hope we can stabilize the figures in second half but whether they will pick up I also don't know. We have to accept the reality that 70% of the country's revenue is from exports, and it is impossible to replace exports by domestic demand," he said.
"I think the stimulus package will help sustain the economy at some point, but cannot boost growth."
Mr Abhisit said the government is working on its contingency economic stimulus plan and that his government is not spending beyond its means.
"The situation is tough but we are taking caution and fiscal discipline seriously. Though government spending and conducting a deficit budget will increase public debt from 41% to 45% next year, this level is acceptable by international standards," he said.
Mr Abhisit pledged the government will not put more pressure on tax collection though it will run a budget deficit, and will improve transparency on investment-related issues.
"I intend to set up a temporary unit to handle all business concerns, and this will be considered in the cabinet meeting next month," he said.
Mr Abhisit also vowed to improve customs procedures and accelerate new infrastructure programmes.
The government was also close to finalising an assistance programme for the embattled auto industry.
