The only major challenge is global economic difficulty, especially in China, the world’s second-largest economy, which is grappling with the slowdown of its domestic economy and the measures set by Beijing to raise investors’ confidence in the management of its financial sector.

NESDB secretary-general Porame-tee Vimolsiri said the major encouraging factors for the Thai economy included the acceleration of government expenditures and investments, especially on infrastructure projects, which will affect the budget disbursements of all state enterprises.

Another plus is the government’s measures to stimulate the economy, while the depreciation of the baht will benefit the export sector and the income and liquidity of business. The decrease in the oil price, which is expected to be even lower than in 2015 on average, will increase the purchasing power of people and the business sector. The NESDB also anticipates that export value will rise by 1.2 per cent this year, while household consumption will increase by 2.7 per cent and overall investment by 4.9 per cent.

In the fourth quarter of 2015, year-on-year GDP growth was 2.8 per cent, compared with 2.9 per cent in the third quarter. On the production side, the non-agricultural sector expanded by 4.2 per cent last quarter, while the agricultural sector declined by 3.4 per cent as it was affected by the drought.

On the demand side, domestic demand increased at a faster pace in line with the 4.8-per-cent expansion of government consumption, compared with 2.5 per cent for private consumption, in the fourth quarter of last year. Those figures were higher than the 2.3-per-cent and 1.8-per-cent expansions in the previous quarter.

Gross fixed capital formation also expanded by 9.4 per cent in the final quarter of last year, with a 1.9-per-cent increase in private investment after a contraction of 10.1 per cent in the third quarter.

Public investment also continued to expand by 41.4 per cent, accelerating from 21.9-per-cent growth in the third quarter of 2015.

Nonetheless, the export of goods and services declined by 3.5 per cent last quarter because of the sluggish global economy. Imports of goods and services also dropped by 1.3 per cent.

Full-year GDP increased by 2.8 per cent, up from only a 0.8-per-cent increase in 2014.

Household consumption and overall investment expanded respectively by 2.1 and 4.7 per cent in 2015. Overall production outside the agricultural sector increased by 3.6 per cent, while production in the agricultural sector dropped significantly, by 4.2 per cent.

The unemployment rate stood at only 0.8 per cent last year, while inflation was minus-0.9 per cent.

The country’s current account was also in surplus by 8.9 per cent of GDP.

“The growth of Thailand’s GDP this year will be in line with the government’s capability of managing and stimulating the economy, especially in the allocation of funds into major infrastructure projects as well as water management to solve the drought problem,” Porametee said.

“The government has been launching measures to look after farmers and lower-income people, as well as in the granting of measures to support investment in the private sector, as well as SMEs [small and medium-sized enterprises] and business start-ups,” he said. Porametee said that for the export sector, the government should lead the private sector to penetrate specific markets, such as Cambodia, Laos, Myanmar and Vietnam, which have spending power and growing economies.