Thailand » Outlook

International Property Brokers forecast is that the global oil prices to a standard will decrease in 2007. This has led to a larger current-account shortfall being forecast for both years (2006-2007). The Bank of Thailand (BOT, the central bank) is predictable to raise interest rates again in response to relatively high inflation.

Financial strategy is probable to remain sensible in 2006-07, with a small budget deficit in 2006 as a result of slower than predictable economic growth. Monetary conditions will continue to constrict in 2006, and the inflation rate will start to fall with self-effacingly inferior worldwide oil prices in 2007.

Real GDP growth is forecast to slow to 4.27% in 2006 as domestic demand weakens due to the political uncertainty, but will bounce back in 2007 as confidence returns. The shortfall on the current account will rise in 2006-07 as a result of determinedly high worldwide oil prices and significant remittances of income, profits and dividends by overseas companies operating in Thailand. There is still a lack of clarity about the future political role of the caretaker prime minister, Thaksin Shinawatra.