Thailand GDP Growth Strongest in 3 Years

Thailand’s GDP expanded by 3.2 percent from a year earlier in the first quarter of 2016, as compared to a 2.8 percent expansion in the previous quarter and beating market expectations of a 2.8 percent growth. It is the strongest expansion since the March quarter of 2013, mainly driven by government spending and net exports while private consumption and investment eased.

On the expenditure side, private consumption grew by 2.3 percent in the three month to March 2016, lower than a 2.6 percent increase in the preceding quarter. The slowdown was partly due to a faded-off effect after the expedited spending driven by fiscal stimulus package and persistently low farm income. Spending on durable and semi-durable goods slightly increased, while non-durable consumption showed better growth. Meanwhile, service expenses increased by 0.4 percent, compared to a 2.0 percent growth in the December quarter 2015. Government expenditure expanded by 8.0 percent, up from a 4.8 percent increase in the previous quarter, contributed by high purchases of goods and services and social welfare benefit. In addition, compensation of employees still increased. Gross fixed capital formation advanced by 4.7 percent, compared to a 9.4 percent increase. Private investment grew by  2.1 percent from a year earlier (from +1.9 percent in the fourth quarter) while public investment expanded by 12.4 percent (following a 41.2 percent rise in the previous three months). Exports of goods and services rose 5.1 percent, rebounding from a 3.3 percent decrease in the fourth quarter 2015. Imports decreased by 4.8 percent, compared to a 1.2 percent fall in the preceding three months.

On the production side, the non-agricultural sector expanded by 3.7 percent, as compared to a 4.2 percent growth in the December quarter.  In contrast, agriculture sector contracted by 1.5 percent, following a 3.4 percent fall in the previous quarter. Growth in non-agriculture sector was seen for: mining and quarrying (+4.8 percent from +4.0 percent in the previous quarter); eelectricity, gas and water supply (+7.3 percent from +5.0 percent), construction (+11.2 percent from +23.9 percent); transport, storage and communication (+5.6 percent from +5.3 percent); wholesale-retail trades and repairing (+5.1 percent from +5.5 percent); financial intermediation (+4.5 percent from +7.5 percent); real estate services (+3.0 percent from +6.6 percent); hotels and restaurants (+15.8 percent from +5.0 percent) and other community, social and personal service (+7.9 percent from +8.3 percent). In contrast, manufacturing  production shrank 0.3 percent (from +0.8 percent, as a result of slowdown in domestic demand). Meanwhile, a contraction in agriculture sector mainly driven by  agriculture, hunting and forestry (-2.5 percent) while   fishery expanded by 9.1 percent.

For 2016, the Thailand's economic planning agency (NESDB) projected the GDP to be at 3.0 to 3.5 percent, compared to earlier forecasts in February at 2.8 to 3.8 percent. Exports in the year are expected to decline by 1.7 percent, following previous projections  at  a 1.2 percent increase.

On a quarter-over-quarter seasonally adjusted basis, the GDP expanded by 0.9 percent from a 0.8 percent  growth in the previous three months and above  consensus of  0.6 percent.

Thailand GDP Growth Strongest in 3 Years

NESDB l Rida Husna |
5/16/2016 2:13:34 PM