on inflation brushed aside
The Bank of Thailand (BOT) and the National Economic and
Social Development Board (NESDB) have brushed aside a suggestion by the
International Monetary Fund (IMF) that the country raise the target
inflation rate from zero to prevent possible deflation.
Previously, the IMF had projected the Thai economy would
continue to grow this year. However, it said the government should closely
supervise the economic development since the financial and business sectors
remained engulfed with non-performing loans.
The IMF also suggested that the BOT consider increasing
the target minimum inflation rate from zero to stand in positive territory
because the inflation rate, if allowed to stay very low, would put the
economy under the pressure of deflation should there be any crisis.
BOT’s Governor M.R. Pridiyathorn Devakula said still
saw no need for the country to raise the target inflation rate.
Chakramon Phasukavanich, NESDB’s Secretary-General,
said that he did not think the Thai economy was on the path to deflation,
adding that inflation would increase automatically when the economy
continued to grow. “We should not accelerate consumption in an excessive
manner. The consumption will grow naturally when the economy expands,” he
Free organic fertilizer
to be distributed to 2 million farmers
The Land Development Department is preparing to
distribute free organic fertilizer to two million farming households as part
of the government’s campaign to promote 2004 as a year for food safety and
The department’s Director-General Ard Somrang said,
“The fertilizer will reduce farmers’ reliance on chemicals and improve
the quality of their soil so they can move over to organic agriculture and
increase their incomes.”
The organic fertilizer developed by the department will
not only increase yields by 10 percent and cut costs by another 10 percent,
but could also cut the use of chemicals by 30 percent. (TNA)
will help sustain growth: KRC
Overall investment in the country is likely to grow
13-15% next year, which could help sustain the economic growth, according to
a report just put out by KASIKORN Research Center (KRC). The think tank
reported that aside from exports, investment would play a vital role in
boosting the economic expansion in 2003-2004.
The report projected that private investment will
continue to increase next year, boosted by impressive operating results in
the business sector, higher production capacity utilization, and inflow of
foreign direct investment. As well, the improved fiscal position should push
up public investment, which had contracted since 1998.
The research center warned, however, that government
should maintain the quality of investment and the stability of the economy.
It urged caution about speculation in assets, particularly stocks and
property, to avoid a repetition of the economic crisis in 1997. (TNA)
Interest rates will stay low for at
least 18 months says BOT governor
Bank of Thailand (BOT) Governor M.R. Pridiyathorn
Devakula has projected local interest rates will continue to stay low for at
least 18 months.
Pridiyathorn said, “Private investment and consumption
has played a key role in boosting economic growth. Private investment
dropped to 14% of the country’s gross domestic product (GDP), from 25%
before the economic crisis in mid 1997. It is necessary to keep the interest
rates low to stimulate the private investment and consumption. We expect the
rates will stay low for at least a year and a half until investment
continues to increase to an acceptable level.” (TNA)