01/08/2013, 00.00
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Economic crisis and political instability risk factors for Thai growth

by Weena Kowitwanij
The forecasts for 2013 speak of a 4.5% growth. International tensions and internal problems, including energy costs, limit development. Concerns in the field of employment: in the first four days of the year 275 jobs lost. Economic analyst criticizes executive’s "populist" policies.

Bangkok (AsiaNews) - For 2013, the Thai growth rate is estimated around 4.5%, confirming a slight growth within and outside the country for the third year in a row. The forecast was drawn up by experts of the Chamber of Commerce, who, however, indicate the need for a strict control of some "risk factors" to prevent sudden collapses. Padermchai Sasomsap, Minister of Labour, today announced that in the first four days of January alone, at least 275 workers have lost their jobs. Employment, together with the economic development policies proposed by the government - branded as "populist" by some analysts - will in fact be the real test for the central executive in Bangkok.

The Governor of the Bank of Thailand, Prasarn Triratworakul states that the expected growth of the GDP (gross domestic product) varies between 4.6 and 4.7%. The fluctuation of the value is tied to the outcome of the Fiscal Cliff approved by the U.S. government and the development of public debt in Europe. A confirmation of the growth rate of 5% with a margin ranging from 4.5 to 5.5% depending on the period, also comes from the Department for fiscal policies: government investment in growth and the general strengthening the international economic environment are crucial factors, ahead of a decline in private sector investment.

With regard to families, experts have announced a small improvement in income thanks to the choice of the government to increase the minimum wage, set at 300 baht (about 10 dollars) per day. Inflation should instead be around 3%, with a margin ranging between 2.5 and 3.5%. With regard to exports, in 2013 the annual growth rate is expected to hit 7.3%.

Among the "risk" factors reported by external experts, and able to influence the Thai growth rate, there are: the financial crisis of the Eurozone and the United States, and political instability and international tensions, such as events in the East China Sea where Beijing and Tokyo are competing for possession of a group of islands, the variability of the exchange rate and natural disasters. Elements within the country are political stability, the lack of a labour force for certain industries, the effects on capital of increasing the minimum wage and the rising costs of energy and transport.

However, there are critical voices of the government's economic policies. Among these columnist Saengthai Kauputhai, economic expert of the weekly Siamrat, for whom the "populist" choices of the executive encourage spending above and beyond the real financial possibilities of families.

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