Thai Q4 GDP Growth Slows to 4%
Thailand's gross domestic product grew by 4 percent year-on-year in the fourth quarter of 2017, following a 4.3 percent expansion in the previous period and below market consensus of 4.4 percent. Government spending and investment rose at softer paces while private consumption and exports grew firmly.
On the expenditure side, government spending went up 0.2 percent, compared with 1.8 percent in Q3, as purchases from enterprises and abroad fell 5.7 percent, while social transfers in kind and compensation of employees increased 6.7 percent and 1 percent, respectively. In addition, gross fixed capital formation advanced 0.3 percent, slower than 1.2 percent in Q3. Public investment dropped 6 percent, as a result of lower public construction (-7.1 percent), while private investment grew 2.4 percent, mainly due to a 3.4 percent expansion of investment on machinery. Spending on private construction contracted 2.3 percent.
On the other hand, private consumption rose 3.5 percent, compared to a 3.4 percent expansion in the prior quarter. The result was mainly due to a favourable growth of non-farming income, low level of inflation rate and high level of consumer’s confidence. Consumption expenditure on durable goods increased 21.8 percent, accelerating from a rise of 10.9 percent in the previous quarter in accordance with continual increasing in personal loans. Expenditure on semi-durable and non-durable goods rose 0.5 percent and 1.8 percent, respectively. Meanwhile, consumption expenditure of services kept rising. In addition, net external demand contributed positively to growth, as exports of goods and services went up 7.4 percent (vs 6.9 percent in Q3) and imports of goods and services rose 7.5 percent (vs 6.5 percent in Q3).
On the production side, the non-agricultural sector expanded 4.6 percent, faster than a 4 percent increase in the previous three-month period. Output grew mainly for: hotels and restaurants (15.3 percent vs 6.9 percent in Q3); wholesale and retail trade (6.9 percent vs to 6.4 percent); electricity, gas and water supply (3.4 percent vs 3.1 percent); transport, storage and communication (8.9 percent vs 7.4 percent); real estate, renting and business activities (5.6 percent vs 4.7 percent); financial intermediation (4.2 percent vs 4.6 percent); manufacturing (3 percent vs 4.2 percent); and mining and quarrying (0.6 percent vs -6.7 percent). On the other hand, a contraction was seen in construction (-5.3 percent vs -1.6 percent).
The agriculture sector shrank 1.3 percent, following a 9.7 percent expansion in the September quarter, due to a fall in both agriculture, hunting and forestry (-1.2 percent vs 9.8 percent in Q3) and fishing (-2.4 percent vs 8.6 percent).
Considering 2017 as a whole, the economy grew 3.9 percent, the highest annual gain since 2012. For 2018, the NESDB maintained its economic growth forecast at 3.6-4.6 percent.
2/19/2018 9:52:58 AM