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Thai finance ministry raises 2017 GDP growth outlook to 3.8%

[BANGKOK] Thailand's finance ministry on Monday raised its economic growth forecast for this year to 3.8 per cent from 3.6 per cent, and upgraded its estimate for export gains, a senior official said.

Exports, a key driver of Thai growth, should increase 8.5 per cent this year, compared with the 4.7 per cent projected in July, Suwit Rojanavanich, director general of the ministry's Fiscal Policy Office, told a news conference.

South-east Asia's second-largest economy this year will be mainly driven by stronger exports and tourism amid improved private investment, he said.

So far, a strong baht has not appeared to dent Thailand's export competitiveness, but the government is worried that trade and economic growth could be dented in 2018 if the baht continues to climb.

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The baht has appreciated by 7.7 per cent against the US dollar this year, the biggest gain among Asian currencies.

Exports recovered in 2017 after a modest 0.5 per cent rise in 2016 following three years of contraction, customs data showed.

For 2018, the ministry predicts economic growth of 3.8 per cent, mainly driven by government spending. It predicts exports will rise 5.7 per cent.

Last month, the Bank of Thailand raised its 2017 economic growth forecast to 3.8 per cent from 3.5 per cent. It also projects growth of 3.8 per cent for 2018.

Thailand's growth has picked up but still lags regional peers. Private investment has remained weak for years while high household debt has crimped consumption.

In 2016, the economy expanded 3.2 per cent.

The finance ministry predicts the central bank will keep its policy interest rate at 1.50 per cent, where it has been since April 2015, throughout 2018.