Vision of economic growth 2022 at 4%

Vision of economic growth 2022 at 4%

Forecast for 2021 raised to 1.2% on the basis of exports and stimulus plans

The atmosphere at Trok Mo Morning Market, also known as Thesa Market, on January 23. The FPO expects private consumption this year to grow by 4.5%.

The Fiscal Policy Office (FPO) kept its average forecast for Thai economic growth this year at 4%, driven mainly by the recovery of domestic consumption and the tourism sector, said the office’s chief executive, Pornchai Thiraveja.

The FPO expected economic growth this year in the range of 3.5 to 4.5 percent, it said on Friday.

The bureau raised its economic growth forecast for 2021 to an average of 1.2% from 1% due to strong exports, state stimulus plans and a successful vaccination program.

Mr. Pornchai said the spike in prices of some products is expected to be temporary and will not diminish national purchasing power.

High global crude oil prices are expected to fall in the second quarter, in line with an expected increase in oil supply.

He said high household debt, which accounted for 89.3% of GDP in the third quarter of last year, was unlikely to dampen domestic consumption this year as debt incurred for spending on goods and consumption was weak.

Of the total debt, 20% came from business investments, while only 27% came from spending on goods and consumption. The balance was allocated to real estate investment and car lease payments.

The FPO predicts that the Omicron variant will impact the Thai economy in the first and second quarters of this year.

The number of infections will peak in March before declining in the second half of the year, the office said.

The government has 100 billion baht remaining of the 500 billion baht borrowed under the second emergency loan decree.

Mr Pornchai said the sum would be enough to manage the impact of the pandemic on the economy as the infection rate improves.

According to the FPO, private consumption is expected to increase this year by 4.5%, while growth in the export sector is expected to reach 3.6%.

The number of foreign tourist arrivals is estimated at 7 million this year.

Public consumption and public investment are expected to grow this year by 1.2% and 3.7% per year, respectively. Private investment is expected to grow by 5% per year.

The FPO forecasts an overall inflation rate of 1.9% this year.

Among the risk factors facing the Thai economy that need to be closely monitored include the uncertainties related to the pandemic, the volatility of the global economic and financial situation and the high energy and crude oil prices on the global market, the office said.

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