The Fiscal Policy Office (FPO) has jumped on the bandwagon by raising its 2017 GDP growth forecast to 3.8% on the back of strong export growth.

The Finance Ministry’s think tank updated its growth forecast to a band of 3.6-4% with an average of 3.8%, up from 3.6% previously, said FPO director-general Suwit Rojanavanich.

The upward revision is based on a new export growth forecast of 8.5% this year, up from a prior projection of 4.7%.

Merchandise outbound shipments surged by 9.3% year-on-year for the nine months to September.

The Bank of Thailand’s Monetary Policy Committee (MPC) in late September raised its GDP growth forecast for both this year and 2018 to 3.8% from the 3.5% and 3.7% it predicted in July.

The rate-setting committee also increased its export growth forecast for 2017 to 8%, up from 5%.

The National Economic and Social Development Board in August raised its 2017 economic growth forecast range to 3.5-4% from the 3.3-3.8% projected in May after GDP rose by 3.7% year-on-year in the April-June period.

The government’s think tank is set to announce third-quarter GDP growth and this year’s final economic growth projection in November.

In the first half, the economy grew by 3.5% year-on-year.

Mr Suwit said public spending is a key engine driving economic growth.

Ramped-up state investment and a clearer schedule for the general election, roughly envisioned for November next year, will build private sector confidence and stimulate private investment, he said, adding that the FPO expects 2018 to be a golden year of investment.

The government’s 190-billion-baht mid-year budget disbursement is expected to speed up and add another driving force to economic growth next year, Mr Suwit said.

The FPO forecasts 3.8% GDP growth next year, matching the central bank’s estimate.

In addition, the FPO has cut its headline inflation forecast to 0.7% in 2017 from 0.8% earlier and estimates that inflation will stand at 1.4% next year.

Mr Suwit said the MPC is expected to keep its 1.5% policy rate on hold until 2018.

The FPO raised its estimate for the number of tourists visiting Thailand to 35.8 million this year from 35 million predicted previously, while its tourism revenue outlook climbed to 1.86 trillion baht in 2017 from 1.84 trillion seen earlier.

For the final quarter, the FPO forecasts the baht to trade at an average of 33 to the US dollar.