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China problems could hurt Thai exports: finance minister
[BANGKOK] Thailand plans to boost domestic consumption and state investment this year as China's economic problems will have a "considerable" impact on its traditional growth engine of exports, the finance minister said.
Exports account for more than 60 per cent of the Thai economy, but over the past three years they have been weak and unable to help lift growth.
Falls in commodity prices at the start of 2016 may mean it is again hard to have exports drive growth.
China, Thailand's second-largest market after the US, accounted for 11.1 per cent of total exports for January-November 2015, according to the commerce ministry data. "China's problems will have a considerable impact to our exports," Finance Minister Apisak Tantivorawong told reporters.
He said using public sector investment and "people's spending" will support the Thai economy. The minister gave no details of plans.
Deputy Prime Minister Somkid Jatusripitak said issues in China "may cause volatility and affect the global markets but Thailand's fundamentals are still strong".
Mr Somkid said the Thai central bank can keep the baht at a level "appropriate for the economy".
Thai officials are counting on the number of Chinese tourists to remain high. Around 8 million Chinese visited Thailand last year, helping tourism be a bright spot for the economy.
Rahul Bajoria, regional economist at Barclays, said the flow of tourists from China should continue this year. "I do not think tourism demand will slow down dramatically, given Thailand's proximity to China and rising Chinese incomes,"said Bajoria.
The World Bank on Wednesday said Thai economic growth will slow to 2.0 percent in 2016 from 2.5 per cent last year.
The central bank has trimmed its 2016 GDP forecast to 3.5 per cent from 3.7 per cent, mainly due to poor exports.