The Bank of Thailand (BoT) has resolved to keep its economic growth outlook for 2016 at 3.1% after tourism growth and domestic consumption continued to show improvement between April and May.
However, the bank is forecasting a 2.5% contraction in the export sector this year despite the positive growth forecast, according to a report by the National News Bureau of Thailand.
The BoT said consumer spending, particularly on durable goods, rose by 7.8% from April to May, thanks largely to the unveiling of new car models and sales promotions.
The agricultural sector has also recovered with a 6.7% expansion in farmers’ income as a result of better produce, higher rubber prices, and fewer risk factors.
The export figures for May 2016, however, showed a 5.6% decline. The figure does not include gold exports, which are seen to contract at a lower rate. But the exports of air-conditioning units to ASEAN and European markets continue to expand due to the warmer global climate.
Meanwhile the Fiscal Policy Office (FPO) of Thailand agreed that the rise in domestic spending in May indicates a pickup in the economy.
The FPO said spending associated with government investments expanded by 51% in May.
The office expects the economy in the second quarter to improve over the first quarter, and is again preparing to adjust its economic growth forecast this month.
Though exports remained in a slump, the office said the May economy was helped along by growing agricultural supplies, rising industrial confidence, and a steady growth in foreign tourist arrivals, particularly the return of Russian tourists to Thailand and the increase in aviation routes made available by low-cost airlines.
The auto industry recovered for the first time in the past 36 months in May. Car sales rose by 8.3%, while motorcycle sales jumped by 14.8% both in the capital city and other provinces.
Photo: Jarcje
