Thailand's Economy Continues To Impress

October 2003
Asia Monitor: South East Asia Monitor Volume 1;Oct2003, Vol. 14 Issue 10, p2
Country Report
Country Report
The article focuses on Thailand's economy. A shock to economic activity caused by the outbreak of flu-like virus SARS led to slightly slower growth during the second quarter of 2003. Thai consumers have taken advantage of policies to encourage a greater uptake of credit, successful in part because of the relatively low leverage of Thailand's personal sector. Credit expansion has ranged from car and house loans to credit and store cards. Rising farm incomes has been an important factor in maintaining private consumption growth during the past year, as has the low interest rate environment prevalent in Thailand. The key interest rate, the 14-day repurchase rate, is now just 1.25%, its lowest level since being introduced in 1997. International ratings agency Fitch Ratings Inc. has upgraded Thailand's long-term foreign currency rating to 'BBB' from 'BBB-', citing the country's deep external-debt reduction during the past five years, economic recovery, and improved fiscal consolidation. The immediate export outlook should remain favorable after 15.9% growth in the year to July and Thailand's economy is also less dependent on exports than regional rivals which will lessen the potential damage from currency gains.


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