From: kamol@ipied.tu.ac.th (Kamol Hengkietisak)
Newsgroups: soc.culture.thai
Subject: Bangkok Post Dec 22: NESDB's prediction of next year's economy
Date: 21 Dec 92 17:14:19 GMT
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THE National Economic and Social Development Board (NESDB) has
predicted the country's economy will grow 8% next year, faster than
this year's rate, with inflation expected to be higher at 5%.
 
But the board warned economic growth would not remain strong unless
the Government implemented a package of plans to stimulate the
economy.
 
The prediction was made by the NESDB in its report Thailand's Economic
Outlook in 1992 and Trends in 1993, which was submitted to the Cabinet
for consideration.
 
The package of measures aimed at stimulating the economy included:
 
o Stimulating private and direct foreign investment by launching a
  campaign to persuade foreign investors to invest in Thailand and
  improving the investment information system. o Escalating the savings
  policy, such as by establishing provident funds, life assurance
  saving schemes and mutual funds. o Looking at public utilities which
  have higher-than-normal service charges.
 
o Speeding-up improvements to the transportation system to eradicate
  problems such as bottle-necks at Klong Toey Port.
 
o Hastening the payment of VAT rebates to exporters.
 
o Lowering the high import taxes on raw materials.
 
o Improving the level of education and labour training to satisfy
  industry demand for skilled workers. o Decentralising development to
  the provinces, concentrating on the potential of each industry in
  each area.
 
o Solving the problem of agricultural water shortages.
 
The NESDB said economic growth would climb from this year's expected
level of 7.4% as a result of more positive domestic and external
factors than this year.
 
The external factors expected to contribute to Thailand's economic
growth included global economic recovery, such as in the United
States, Japan, newly-industrialised countries and ASEAN, with the
exclusion of Western Europe which would remain sluggish.
 
The global recovery would result in trade expansion, it said.
 
But the board warned that trade protection would also intensify next
year and hurt Thailand's tapioca and textile exports.
 
The NESDB said production in the agricultural sector would expand only
2.5% next year because of the water shortage problem which would
affect major crops, particularly the second rice crop.
 
The growing areas for the second rice crop would be minimised under
the Government's policy to save water.
 
The NESDB said the prices of several farm products, including rice,
tapioca, pineapple and coffee, would fall.
 
It predicted a 10% expansion in private sector investment next year,
citing the implementation of several huge projects including Shell
Thailand's 50,000-million-baht oil refinery project at Mab Ta Phut
Industrial Estate, Caltex's 40,000-million-baht oil refinery project
and 20,000-million-baht petrochemical project, as well as the
speeding-up of the Eastern Seaboard Project and the development of the
country's second international airport at Nong Ngu Hao.
 
But investment in Board of Investment-promoted projects would decline
next year, it said.
 
Tax reductions which would be introduced under the ASEAN Free Trade
Area (AFTA) agreement would induce both local and foreign investment
in sectors in which Thailand was very competitive, such as rubber
products, ceramics, glass products, electronics, textiles, gems and
jewellery and cement.
 
The NESDB forecast that exports would grow, but at a declining rate.
Total export value was expected to increase 14.9% from 840,000 million
baht this year to 965,000 million baht next year.
 
The increase was lower than this year because of the higher cost of
raw materi3Fg 9b	=UI1:!%
competitive with exports from China and Indonesia.
 
But the NESDB forecast brighter export prospects for some items,
including canned baby corn, canned fruit juices, processed seafood,
canned bamboo shoots, electronic calculators, ceramics, air
conditioners and parts, toys, cameras and camera equipments.
 
But imports were expected to increase 14% to 1,220,000 million baht
because of two main factors -- an increase in capital good and raw
material imports and the restructure of the taxes on imported semi-raw
materials and cars.
 
Thailand was therefore expected to suffer a 255,000-million-baht trade
deficit, equivalent to 7.6% of Gross Domestic Product, it said.
 
This year's trade deficit would be about 230,000 million baht or 7.7%
of GDP.
 
The total current account deficit would be 5.9% of GDP, or about
200,000 million baht, although the country's service balance would
improve because of the recovery of the tourism sector.
 
This year's current account deficit would be about 180,000 million
baht, or 6.1% of GDP.
 
The board predicted the inflation rate would increase from 4.2% this
year to 5% next year because of growth in consumer spending and
investment and increases in the prices of public utility services
including electricity, water and transportation.
Organization: Doctoral student, Mechanical Engineering, Carnegie Mellon, Pittsburgh, PA