Thailand's economy is expected to grow by up to 5% this year, much more than earlier forecast by the country's finance ministry.

The news comes five years to the day after Thailand allowed the devaluation of its currency, the bhat, which triggered the Asian economic crisis.

Domestic consumption alone will not be enough to support growth

Chakramon Phasukvanich

The new data is a sharp upward revision of a forecast two months ago, which predicted just 3.7% of growth.

If the Thai economy performs as expected, it will have made an astounding turnaround from last year's meagre 1.8% growth rate.

'Unofficial' forecast

"The whole year's economic growth rate for 2002 will be at least 4.5%... with a fairly good chance of hitting 5% by year-end," a document published on the Finance Ministry's website said.

Bangkok is emerging from Asia's economic crisis

However, a ministry official later tried to dampen expectations, saying the "unofficial" forecast had been posted "by accident".

He declined to say, though, whether the forecast would be revised or corrected.

According to the document, preliminary data from exports and domestic sales of cement, cars and houses suggested a rapid acceleration of economic growth.

The recovery of the Thai economy is driven both by rapidly rising domestic consumption, and a new surge of investment in the Thai economy.

A slow economic recovery across Asia is helping to underpin the trend.

"GDP growth of 5% is possible, but whether it will be met depends on export growth, because domestic consumption alone will not be enough to support growth," said Chakramon Phasukvanich, secretary-general of the National Economic & Social Development Board, which compiles Thailand's official statistics.

Buoyant shares

With an economy geared for growth, profit expectations for Thai companies are rising as well.

On the Bangkok stock market, investors have been buying shares in selected finance, banking and property companies.

However, rumours reported in the Thai press that Muslim extremists were planning to attack US interests in the country on 4 July put a cap on market gains.