A report on Thai Economic Outlook 2555 “Thai economy in 2554 tends to decline as a result of flood crisis, but it is predicted to recover in 2555”

Thai economic expansion in 2554 is predicted to decline at a rate of 1.1% since the flood crisis in the end of the year left a serious impact on industrial and agricultural production and; therefore, affected goods manufacturers and service providers, leading to scarce materials. Economic expansion in private sector consumption is predicted to decline because the flooding situation made people consume less. Those products which get affected include food, drinks, restaurants, and hotels.

Moreover, the declining economic expansion rendered a decline in agricultural income as a result of the flood-damaged agricultural products. Private sector investment is also predicted to decline according to industrial production deadlock, especially from industrial parks in the central part of Thailand which were severely affected by the flood. For goods and service export, the economic expansion is predicted to decline because the flood crisis obstructed production and export to international market. An uncertainty of the world economic expansion due to real estate and employment problems in the US together with public debt in Eurozone contribute themselves to the decline of economic expansion. For domestic economic stability, a general inflation rate in 2554 is predicted to be at 3.0%, accelerating from the cost of agricultural goods such as meat, vegetable, and fruit which are pressured by bad weather and cost of fuel which is driven by crude oil price in the international market.

Mr. Somchai Sujjapongse, Director General of the Fiscal Policy Office distributed a press release on Thai Economic Outlook in December 2554, as follow: “The economic expansion is predicted to decline at a rate of 1.1% since the flood crisis in the end of the year left a serious impact on industrial and agricultural production and; therefore, affected goods manufacturers and service providers, leading to scarce materials. Economic expansion in private sector consumption is predicted to decline because the flooding situation made people consume less. Those products which get affected include food, drinks, restaurants, and hotels. Moreover, the declining economic expansion rendered a decline in agricultural income as a result of the flood-damaged agricultural products. Private sector investment is also predicted to decline according to industrial production deadlock, especially from industrial parks in the central part of Thailand which were severely affected by the flood. For goods and service export, the economic expansion is predicted to decline because the flood crisis obstructed production and export to international market. An uncertainty of the world economic expansion due to real estate and employment problems in the US together with public debt in Eurozone contribute themselves to the declining economic expansion. For domestic economic stability, a general inflation rate in 2554 is predicted to be at 3.0%, accelerating from the cost of agricultural goods such as meat, vegetable, and fruit which are pressured by bad weather and cost of fuel which is driven by crude oil price in the world market.”

Regarding Thai economy in 2555, the Fiscal Policy Office predicted a tendency to recover at 5.0% acceleration rate (forecasted range at 4.5%-5.5%) mainly driven by domestic demand which is predicted to accelerate as a result of a necessity to restore accommodations and machines in factories after the flood. Moreover, the governmental policy to promote spending such as increased wage and salary for civil servants measure, and rice pawn project play a significant role in an acceleration of the economy. However, international demand is predicted to slightly decline because of declining economic expansion in main trading partners. For domestic economic stability, a general inflation rate is predicted to reach 3.5% in 2555 (forecasted range at 3.0%-4.0%) according to oil demand in the world market which is predicted to decline.