Finance ministry raises 2018 GDP growth outlook to 4.2%

The finance ministry on Monday raised its economic growth forecast for this year to 4.2% from 3.8%, and also raised its estimate for exports, an official said.

Exports, a key driver of growth, should increase 6.6% this year, compared with the 5.7% predicted in October, ministry spokeswoman Kulaya Tantitemit told a news conference.

The economy will mainly be driven by government spending and large public infrastructure projects this year, she said.

Economic growth in 2017 is now estimated at 4.0% - which would be the fastest pace since 2012 - and compared with the 3.8% the ministry projected three months ago, due mainly to stronger exports and tourism, Ms Kulaya said.

Official 2017 gross domestic product (GDP) data is due on Feb 19. The economy expanded 3.2% in 2016, still lagging regional peers.

In December, the Bank of Thailand raised its economic growth forecasts for both 2017 and 2018 to 3.9% from 3.8%.

Ms Kulaya said the strong baht, which is hovering at its highest level in more than four years against the dollar, should have only a little impact on exports because the economies of its trading partners are still showing solid expansion.

The baht has appreciated by 4% so far this year, the second-most among Asian currencies.

The Finance Ministry also forecast the central bank will keep its policy interest rate at 1.50% throughout 2018. The rate has been unchanged since April 2015.

The central bank next reviews monetary policy on Feb 14, and most economists predict no policy change.

Source: Fiscal Policy Office / https://www.bangkokpost.com/business/news/1403950/finance-ministry-raises-2018-gdp-growth-outlook-to-4-2