World Bank raises Thailand growth forecast to 3.5%

Beams are dropped at a construction site of the mass transit Red Line’s Bang Sue-Rangsit section on June 16, 2017. (Photo by Wichan Charoenkiatpakul)

The Thai economy is expected to grow 3.5% this year, up from 3.2% initially predicted in April, and rising to 3.6% next year, the World Bank said on Thursday.

The economic recovery is gaining momentum as farm incomes pick up after drought, merchandise and tourism exports rise and fiscal stimulus continues, the World Bank said in a statement.

In April, it predicted 2018 GDP growth of 3.3% for Thailand.

“Thailand has the potential to raise growth to above 4% by addressing structural bottlenecks — education equality, services liberalisation and public infrastructure management,” it said.

However, risks to the economic recovery include political uncertainty, if reforms and elections become postponed, while a deterioration in the global environment, including increased trade protectionism and a slowdown in the Chinese economy may impede Thailand’s export momentum and private investment recovery, the international lender said.

The economy expanded a better-than-expected 3.7% in the second quarter from a year earlier, prompting the state planning agency to raise its 2017 growth projection to a range between 3.5% and 4% from a range of 3.3% and 3.8%.

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