Thai Report Forecasts Economic Growth of 2 or 2.5 Percent.

Byline: Parista Yuthamanop

Jul. 27--Economic growth this year was expected to range between 2 percent and 2.5 percent , down from previous estimates of 2.5 percent to 4 percent , the Monetary Policy Committee announced yesterday.

Core inflation, excluding energy and food prices, was expected to remain well under the 3.5 percent target over the next two years. In its latest inflation report, the MPC announced that core inflation this year was expected to range at 1.5 percent to 2 percent as weak domestic demand had restrained price rises. Core inflation in the first quarter stood at 1.3 percent .

Atchana Waiquamdee, senior director of the Bank of Thailand's monetary policy group, said inflation was expected to be between 2 percent and 3 percent in 2002.

Subdued prices had reduced pressure on the central bank to raise interest rates, although Dr Atchana noted that inflation could rise over the 3.5 percent target briefly in the first quarter of next year.

"Growth is likely to be between 2 percent and 3 percent this year, with a high possibility of staying at the lower end of the range," she said.

The MPC, formerly known as the Monetary Policy Board, meets monthly to set interest rate policy with the goal of ensuring sustainable growth and price stability.