Thailand's Finance Minister Chalongphob Sussangkarn said the country's economy will pick up next year after the government increased spending and foreign investment recovered.
The expansion may "easily" exceed 5 percent next year, up from an estimated 4.5 percent this year, he said in an interview yesterday in Washington.
Growth "certainly will pick up because of these investment projects, whether on the public-sector side or the foreign-investor side, that will be kicking in," Chalongphob said.
Thailand, which has depended on exports since last year's coup eroded domestic confidence and demand, has lifted public spending and lured back international investors to shore up growth. Chalongphob anticipates that will help compensate for a global slowdown.
"Over time, maybe the pace of export growth may slow down a little bit, particularly with the problems in the subprime market, which may affect the US economy," Chalongphob said. "So we already put in place the additional engines that will help to push the economy along if exports begin to decline, and this is through investment."
Thailand's Cabinet agreed last Tuesday to spend 59 billion baht (US$1.9 billion) to build a railway line in Bangkok, the third mass-transit project approved by the government for the capital.
Ford Motor Co, the second-largest US carmaker, and its Japanese affiliate Mazda Motor Corp said on Oct. 9 they would spend more than US$500 million to set up a plant in Thailand.
"Foreign business confidence has actually gone way up" after the government tried to show investors it's not "turning our back to the world," Chalongphob said.
But consumer confidence is at a five-year low after sliding in 11 of the past 13 months. The central bank cut its benchmark rate at five of seven meetings this year to buoy consumption.
The inflation rate remains "relatively low" at a little above 2 percent, and the country has "room yet to absorb the increase in oil prices," Chalongphob said.
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