Thailand's central bank revised upwards its forecast for economic growth this year due to the momentum in private demand to 4.9 percent in its latest Monetary Policy Report from a previous forecast of 4.6 percent in its October inflation report.
The Bank of Thailand (BOT) also revised upwards its forecast for 2012 to growth of Gross Domestic Product of 5.9 percent from a previous forecast of 5.7 percent. For 2014 the BOT forecasts GDP growth of 4.8 percent.
The policy report, which is issued to "enhance public understanding of the BOT's policy stance" also said exports were projected to recover gradually and contribute more significantly to growth from the second half of 2013 onward, which will help shore up economic momentum after some fiscal stimulus measures expire.
"Going forward, the MPC (monetary policy committee) assesses downside risks from the global economy to decline but still remain somewhat elevated," the report said, adding the fan chart for growth thus remained downward-skewed, but to an extent lesser than in the previous projection.
The BOT's headline inflation forecast for 2013 was maintained - it expects headline inflation of 2.8 percent - declining to 2.6 percent in 2014. In 2012 the inflation rate was 3.0 percent.
The forecast for core inflation, which the BOT targets, was also unchanged in the report. In 2013 the BOT forecasts core inflation of 1.7 percent, down from 2012's 2.1 percent, declining further to 1.6 percent in 2014. The BOT targets core inflation of 0.5-3.0 percent.
"Given reduced downside risks from the domestic economy, inflation fan charts are balanced this time, compared to the previous ones that were skewed to the downside," the report said.
The policy report largely mirrors the BOT's statement following the last meeting of the MPC on Jan. 9 when it voted unanimously to maintain the policy rate at 2.75 percent.
However, the MPC added that it was closely monitoring financial stability risks that might arise from persistently high credit growth, rising household debt and volatile capital flows.