Thailand's GDP forecast downgraded to 7% on oil prices

Thailand's GDP forecast downgraded to 7% on oil prices

Bangkok, Thailand, Associated Press

Thailand's gross domestic product growth will likely reach 7
percent this year - falling short of an ambitious 8 percent
target - because of rising world oil prices, Prime Minister
Thaksin Shinawatra said on Friday.

"I don't think the GDP growth this year will be as low as 6.5
percent like some people expect. Seven percent will be most
likely," Thaksin told reporters. "The oil prices will have some
impact on our economy, but we will try our best to minimize the
impact."

The prime minister also predicted global oil prices will
continue to dog Thailand's economy for the next decade.

"Higher oil prices will remain our big problem in the next 10
years, but we will try to find the way out," Thaksin said.

Thailand's GDP - the value of all goods and services produced
- grew 6.7 percent in 2003.

Thaksin said inflation won't rise significantly despite higher
oil prices. "Inflation won't be that high. I can ensure it won't
exceed 3 percent this year," he said.

The government started subsidizing fuel prices on Jan. 10 to
minimize the impact of global oil price volatility on the
domestic economy. It has since raised the price of gasoline
following the recent surge in oil prices, and has indicated it
may be boosted again.

Thaksin earlier said the government plans to launch energy-
saving campaigns to reduce oil consumption. Government agencies
may be required to use alternative fuels such as natural gas and
"gasohol," a blend of ethanol and gasoline.

Deputy Prime Minister Suchart Jaovisidha said on Friday a plan
to cut broadcasting time for state-run television in order to
save energy may be implemented. Thailand imposed such a
restriction 10-years ago.