Thailand's economy unexpectedly grew in the second quarter from the first as a surge in exports offset deadly political unrest, data showed on Monday, cementing expectations interest rates will rise further this year.
The state planning agency which compiles gross domestic product data nearly doubled its 2010 economic growth target to 7.0-7.5 percent from 3.5-4.5 percent predicted in May at the height of the worst political unrest in modern Thai history.
"The revision of 2010 GDP implies that the state agency is more bullish on the economy than other organisations," said Nuchjarin Panarode, an economist at Nomura Securities. The Bank of Thailand is widely expected to raise its benchmark policy rate by a quarter point to 1.75 percent on Wednesday. Most economists polled by Reuters after the data said they still expected rates to rise to 2.0 percent by the year end.
Six month swap rates starting six month forward were little changed and consistent with expectations that official rates will reach 2 percent by the end of 2010. Thai baht inched up 0.13 percent to another 28-month high in early trade on rising capital inflows into.