The Bank of Thailand has maintained its 2007 economic growth forecast of 4% to 5% despite signs of slowing export growth due to the baht's rapid appreciation. The Commerce Ministry this week said preliminary export figures for July showed 5.9% growth from the year before in dollar terms, a sharp decline from the 18% year-on-year growth posted in the previous month.
Amara Sriphayak, a senior director for the central bank's domestic economy department, said that the decline in export growth had been anticipated in the central bank's economic forecasts.
''You need to consider whether the decline in annual growth reflects a high base effect last year or not, or whether this is due to the stronger baht,'' she said yesterday.
''It's clear that some sectors have been affected more than others by the baht, but it's hard to say whether this has been the main factor behind the decline.''
The baht has strengthened by 4.6% against the dollar this year and is up 16.2% since the beginning of 2006 thanks to steady trade and current account surpluses.
Mrs Amara cautioned against excessive alarm about the slowdown in exports, noting that it was too early to say whether the declines represented the start of a new trend based on just a single month of data.
In any case, the central bank remains confident that economic growth will reach 4% to 5% this year, with a current account surplus of around $7 to $9 billion. Export growth is projected at 12% to 15% this year in US dollar terms.
Bangkok Post, August 23, 2007