The improved growth was attributed mainly to government spendings in mega projects and the Sunday’s charter referendum which ended peacefully with the majority giving approval to the charter.
Thanawat Pholvichai, director of the UTCC’s Center for Economic and Business Forecasting, said the recent sign of economic recovery was seen in the consumers’ confidence index in July which rose for the first time in seven months, along with lower inflation rate, improving drought situation helped boost the growth.
Besides, certain farm crop prices also improved after drought has eased, he said.
Government spendings on mega projects are also expected to be accelerated after the referendum ended with peace, thus boosting investors’ confidence, he said.
Based on all mentioned factors, he forecast better economic performance in the second quarter with the growth hitting a three-year high of 3.2% stimulated by stimulus measures and tourism.
He also said the economy in the following quarters is expected to become more promising after the peaceful referendum. This will lead to greater political stability.
He said the approval of the charter amid peaceful referendum would benefit the overall economy and boost the confidence of both local and foreign investors, particularly the promised election next year.
But Mr Thanawat expressed concern over low prices of rubber, maize, tapioca, and low exports.
The UTCC cut its forecast for exports this year to a contraction of 2.1% from a 0.8% expansion earlier.