Thai Economy Grows Fastest in 2-Years


Thailand’s GDP expanded by 3 percent from a year earlier in the first quarter of 2015, up from downwardly revised 2.1 percent reported in October to December, but below market expectations. The growth was boosted by private spending and a surge in public investment while exports slowed sharply.

On the expenditure side, private consumption rose 2.4 percent year-on-year, accelerating from a 2.1 percent growth in the previous quarter, as purchasing power of households increased. Gross fixed capital formation expanded by 10.7 percent, surging from a 3.2 percent growth in the December quarter, mainly due to a 37.8 percent expansion in public investment, both in construction and machinery. Private investment grew by 3.6 percent, moderating from a 4.1 percent in the preceding quarter. General government consumption rose by 2.5 percent, slowing from a 3.6 percent expansion in the last quarter of 2014 as an increase in purchases of goods and services (+14.7 percent) and fixed capital consumption (+5.3 percent) were unable to offset a decline in compensation  of employees (-1.5 percent). Exports of goods and services grew 1.0 percent, slowing from a 4.9 percent growth in the preceding quarter, while imports increased by 2.3 percent.   

On the production side, the non-agricultural sector expanded by 4.1 percent, as compared to a 3.1 percent growth in the December quarter. In contrast, the agricultural sector declined by 4.8 percent, compared to a 3.2 percent fall in the preceding quarter, as yield of major crops fall. The growth of non-agriculture were seen for: the construction sector (+25.4 percent from +1.3 percent in Q4); hotels and restaurants (+13.5 percent from +3.3 percent); financial intermediation (+9.6 percent from +7.0 percent); electricity, gas and water supply (+3.8 percent from +8.6 percent); manufacturing (+2.3 percent from +1.4 percent); wholesale and retail trade, transport, storage and communication (+7.1 percent from +5.7 percent); repair of vehicles and personal household goods (+3.9 percent from +2.8 percent) and real estate (+2.8 percent from +2.6 percent). A decline in the agricultural sector was mainly contibuted by a 5.3 percent fall in agriculture, hunting and forestry. 

On a quarter-over-quarter seasonally adjusted basis, the GDP increased 0.3 percent, significantly slowing from a revised 1.1 percent expansion in the previous period.

The Thailand government's economic-planning agency, NESDB, slashed its 2015 GDP growth estimate to a range of 3.0 to 4.0 percent from an earlier 3.5 to 4.5 percent. NESDB also lowered  its export-value growth target to 0.2 percent from its previous estimate of 3.5 percent, mainly due to weak global economy and low agricultural prices. 

Thai Economy Grows Fastest in 2-Years


NESDB l Rida Husna l rida@tradingeconomics.com
5/18/2015 9:28:20 AM