Thailand Q4 GDP Annual Growth Above Expectations


Thailand's gross domestic product grew by 3.7 percent year-on-year in the fourth quarter of 2018, following a downwardly revised 3.2 percent expansion in the previous period and slightly above market consensus of 3.6 percent. Both private consumption and investment rose faster, while government spending slowed and net external contributed negatively to GDP growth.

On the expenditure side, private consumption increased 5.3 percent, compared to a 5.2 percent expansion in the prior quarter, mainly due to a rise in both farm and non-farm income. Durable spending, in particular spending on personal vehicles also increased robustly. Meantime, both semi-durable and non-durable goods spending, together with net services also sturdily expanded.

Gross fixed capital formation advanced 4.2 percent, faster than 3.9 percent in Q3. Private investment grew 5.5 percent, mainly due to a 5.6 percent expansion of investment on machinery. In addition, spending on private construction expanded 5.1 percent. Meanwhile, public investment contracted 0.1 percent ( vs 4.2 percent in Q3), largely due to a decrease in government investment (-3.0 percent) and a slowdown in state enterprise investment (4.6 percent vs 9.9 percent).

Conversely, government spending went up 1.4 percent, compared with 1.9 percent in Q3, attributed mainly to a rise in purchase of goods and services (11.3 percent vs 2.1 percent) along with compensation of employees (0.1 percent vs -0.5 percent). However, social transfer in kind fell (-8.9 percent vs 26.2 percent in Q3).

Meanwhile, net external contributed negatively to GDP growth, as exports of goods and services went up only 0.6 percent (vs -0.9 percent in Q3) while imports of goods and services rose at a faster 5.6 percent (vs 11.0 percent in Q3).

On the production side, the non-agricultural sector expanded 4.0 percent, accelerating from 3.2 percent expansion in the previous three-month period. Output grew at a faster pace for: manufacturing (3.3 percent vs 1.6 percent in Q3); wholesale and retail trade (7.5 percent vs 7.3 percent); transport, storage and communication (6.1 percent vs 5.3 percent); hotels and restaurants (5.3 percent vs 4.1 percent); electricity, gas and water supply (5.7 percent vs 1.1 percent) and health and social work (4.0 percent vs 2.1 percent). 

On the other hand, slower growth was seen in real estate, renting and business activities (3.6 percent vs 4.2 percent); financial intermediation (1.8 percent vs 3.1 percent); construction (3.4 percent vs 4.5 percent); other community, social and personal services (7.0 percent vs 7.8 percent) and public administration and defence (0.1 percent vs 0.4 percent). Also, agriculture increased 1.4 percent, easing from a 2.7 percent growth in the September quarter, amid lower yields of rubber, fruits and oil palm while those of paddy, maiza and cassava went up. Also, production of livestock such as swine and chicken decreased. In addition, fishing output continued to fall on lower external demand (-2.5 percent vs -3 percent). Contractions were also registered in mining and quarrying (-0.7 percent vs -1.3 percent) and education (-0.7 percent vs -1.2 percent in Q3).

On a quarterly basis, the GDP expanded 0.8 percent in the three months to December, reversing from a downwardly revised 0.3 percent contraction in the previous period and beating market consensus of a 0.6 percent expansion.

In 2018, the Thai economy advanced 4.1 percent, compared to an upwardly revised 4.0 percent expansion in 2017, and marking the fastest growth since 2012.

For 2019, the NESDB expects Thailand to grow between 3.5-4.5 percent, with exports seen up 4.1 percent and private consumption and total investment to rise 4.2 percent and 5.1 percent, respectively.


Thailand Q4 GDP Annual Growth Above Expectations


Nesdb, Thailand l Chusnul Ch Manan| chusnul@tradingeconomics.com
2/18/2019 10:42:35 AM