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BOT (Bank of Thailand) : February Data Show Further Improvements In Economy

Apr 1, 2010M

The Thai economy is steadily expanding thanks to February's exports, tourism and consumption, says the Bank of Thailand. Consumer purchasing power accelerated from January to reach pre-crisis levels last seen 18 months ago, said Suchart Sakkankosone, senior director for the Domestic Economy Department. High farm incomes - especially in oil palm, rice and rubber - and tourism gains drove sales of passenger cars, motorcycles, pickup trucks and imported consumer goods. The Private Consumption Index rose by 9.7% year-on-year last month compared with 0.3% the previous February. Orders for electronic parts and electrical appliances, and high farm prices drove exports. Demand from Asean and China drove exports in recent months, said Mr Suchart. The public debt crises in Greece, Portugal and Ireland were the main drags on global consumption.

"The overall trend of domestic consumption is positive," he said."It should be sustainable for several months as many factors remain supportive. The Asian economic recovery has benefited from the global trend. Thai exports should perform well in terms of volume." Domestic political unrest could have a short-term impact on tourism as most visitors are from Asia. But tourism increased from February last year and hotel occupancy rates picked up from January, he said.

The manufacturing sector improved both in terms of the domestic and export oriented markets.

Industrial capacity utilisation picked up from January, rising to 70%.

But the central bank's business survey found investors are increasingly wary of political uncertainty, although more optimistic about the economy, he said.

Ongoing political uncertainty could affect confidence of consumers, investors and tourists in the short term, he added.

A House dissolution, as demanded by the red-shirt protesters, would affect the funding of projects under the Thai Khem Khang spending scheme and delay disbursement of the 2011 fiscal budget. But it could improve consumer and investor confidence if it helped resolve the political impasse, he said.

Mayuree Chowvikran, senior vicepresident of Kim Eng Securities, said February's economic trend reflected positive momentum amid a favorable backdrop of the US economic recovery.

"The economic figures for January were better than expected. And the indicators in February continued to be good," she said.

Robust sales at the ongoing motor show and export orders for hard disk drives suggest the positive trend was continuing in March.

Private investment was up in February, although there were political concerns, and bank lending also improved.

Tom Paiboon Nalinthrangkurn, chief executive of Tisco Securities, said the market expected Prime Minister Abhisit Vejjajiva to dissolve the House in the fourth quarter."Given this, there is enough time for stimulus measures to be implemented," he said.

- BANGKOK POST

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