Thailand's Economic Growth Rises 4.3 Pct

Political uncertainty continues to weigh on the Thai economy, but the surprising strength in the first quarter may explain why the Bank of Thailand said recently that it would wait to see how growth and oil price trends develop before deciding whether to lower interest rates further.

So far this year, the central bank has cut its one-day benchmark rate by 1.5 percentage points to 3.5 percent.

The economy also expanded 4.3 percent in the fourth quarter. Economists had predicted the economy would slow a bit to 4 percent in the first quarter.

Compared with a year earlier, first quarter gross domestic product grew a seasonally-adjusted 1.2 percent from the previous quarter, according to the National Economic and Social Development Board.

However, the board has lowered its 2007 growth forecast range to 4 to 4.5 percent from a previous projection of 4-5 percent, reflecting the weakness economists have been seeing in the domestic economy.

Political uncertainty has stalked the economy since a coup overthrew the government of Prime Minister Thaksin Shinawatra. The military-backed government has promised elections by the end of this year.

Thai stocks rose on the news. The Stock Exchange of Thailand index was up 1.1 percent at 762.51 points, just off a fresh one-year high of 763.52.