The government’s Bt2 trillion investment on infrastructure development will not stimulate Thailand’s economy in the near future but will take at least a few years, a leading economist said today.
Somprawin Manprasert, deputy dean of the Chulalongkorn University Faculty of Economics said the mega budget spending, if approved, would take some time before construction could start and positive contributions to the economy would take several years.
However, once the projects materialise, they will greatly stimulate the economy, he said.
He said Thailand’s gross domestic product (GDP) growth this year will be lower than 4 per cent given the government’s interrupted economic policy and short-term stimulation measures.
It is necessary that the government maintain economic growth to avoid volatility and boost manufacturing efficiency especially in education and infrastructure development to strengthen the nation’s economic pillars, he said.
He said Thailand’s efficiency would diminish and GDP growth decline if the government fails to take action, he added.
He expressed concern that the mammoth borrowing would lead to the problem of public debt in the long run as some of the projects would not be achieved as projected while the government would shoulder heavier burden from higher ageing population.
The government must closely monitor all projects to ensure they move forward as planned, he said.
Dr Somprawin said the US Federal Reserve’s announcement to retain the quantitative easing stimulus should strengthen the US economy next year and consequently contribute to global economic expansion.
The International Monetary Fund has predicted global GDP growth at 3.8 per cent next year – a positive factor for Thailand’s GDP growth, forecast at 4.5-5 per cent next year.
Thailand’s export growth next year, though predicted at lower than 10 per cent, should be better than this year but concerns remain regarding household debt which rocketed to 80 per cent of GDP, prompting a warning by the Bank of Thailand, he said. (MCOT online news)
