Asia News Network . Bangkok

Economic guru Virabongsa Ramangkura said Friday that Thailand may fail to reach its new target of 15-per-cent export growth this year, due mainly to the failure of the government’s financial policy to halt the upward spiralling of the baht.

Commenting after speaking to 60 Thai trade counsellors from overseas and 600 businessmen in Bangkok, Virabongsa said the baht would continue its appreciation this year.

This will hit the export sector hardest, which is the country’s major engine for economic growth, he said. The Commerce Ministry on Wednesday revised upward its export target for the year from 10-12.5 per cent to 15 per cent.

To ensure reaching this target, Virabongsa urged the government to aggressively cut the policy interest rate rather than be concerned about inflation.

‘The Bank of Thailand has proceeded with the wrong financial policy. No country is concerned about curbing inflation rather than stimulating the economy as a whole,’ said Virabongsa, a former deputy prime minister who is now the chairman of the executive board of Advance Agro.

For instance, he said, the Chinese government has a clear policy to focus on exchange-rate targeting, while some countries have focused on employment rates. But only the Bank of Thailand has targeted inflation, which has created very few results for the national economy.

He stressed that Thailand is facing ‘stagflation’ and the mistake will last throughout the next two years. The country’s continued economic slump and high inflation have been the major causes of recession.

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