The Thai economy will grow at a faster pace in the second half of the year, according to the Thai Chamber of Commerce. Farmers are expected to earn more income and the effects of the government stimulus will take hold in the latter half of 2016.
The Thai Chamber of Commerce said on Tuesday that growth is projected to expand by 3.3%, with a 2.6% increase in exported goods and 0.9% inflation.
Isara Vongkusolkit, chairman of the Chamber of Commerce and head of the Board of Trade of Thailand, projects a growth rate of 3.2% to 3.5% for 2016. He expects exports to expand by 0.8% and inflation at 0.4%.
Mr. Isara also projects that commodity prices, which includes farm products, will rise with oil prices. Oil prices are expected to balance out in the second half of the year due to lower supply and higher demand.
Rubber, rice and oil palm prices are expected to rise and boost the purchasing power of local farmers. This factor will drive the economy higher in the second half of the year. Government stimulus, tourism, low policy interest rates and a recovery in exports will also help drive the economy forward.
Thailand still faces a number of challenges this year, including strict lending, the prolonged drought, China’s decision to reduce imports, and the potential ban on Thailand’s fishing products.
Chan Namchaisiri, Federation of Thai Industries chairman, says the Thai Industries Sentiment Index climbed to 86.4 last month from 85 in April. The improvement was driven by an increase in farm product processing, higher sales of education products and new policies that lifted the value of industrial products.