Thai GDP will climb 4% in 2018, says Kasikornbank Research Center (K-Research), citing an expected surge in private and public investment.
Thailand's economy is expected to grow by 4.2% in the first half of 2018 and 3.9% in the second, said Nattaporn Triratanasirikul, head of macroeconomics at K-Research.
Domestic investment from the private and public sectors and the global economic recovery will help maintain the economy's momentum, she said.
Domestic investment will grow by 4.3% next year, according to K-Research. Private investment will rise 3%, while public investment will leap 8%, assuming the government sticks to the general election roadmap set for next year.
This year, domestic investment growth is expected to grow marginally: 1.6% for the private sector and 1.8% for the government.
"If the general election is prolonged, investor confidence and private investment will be negatively affected," Ms Nattaporn said. "Under this assumption, private investment growth may decline to 1.5% next year, half the projected 3%, and reduce GDP growth by 0.2 percentage points."
The government will start disbursing its budget in the second quarter of 2018, in line with the public investment plan. The development of the Eastern Economic Corridor (EEC), according to the plan, will do much to bolster investor confidence.
The EEC Act, which is expected to clear the National Legislative Assembly in January, will support private investment in the second half of next year.
Exports and tourism are set to underpin next year's expansion, despite their lower growth rates this year driven by a high-base effect, Ms Nattaporn said.
In 2018, exports are expected to notch a 4.5% growth rate, down from 9% this year. Tourism growth is forecast at 6.5-7.5% in 2018, slightly slower than this year, when it grew by 8.2%.
But spending per person per trip by foreign tourists is expected to increase to 6,450 baht during the first 10 months of next year, up from 5,345 baht in the same period this year.
In addition, private and public consumption will grow by 3% and 1% next year, respectively, said K-Research.
The company expects the Bank of Thailand's Monetary Policy Committee to keep its policy rate unchanged until late 2018, despite the upward trend of the US rate.
The US Federal Reserve is expected to hike its policy rate three times next year. The Bank of Thailand may increase its policy rate late next year after the Fed's hikes, assuming the country's economy shows strong signs of momentum, Ms Nattaporn said.
