Thailand GDP Growth Strongest in Over 3 Years


Thailand’s GDP expanded 3.5 percent from a year earlier in the second quarter of 2016, compared to a 3.2 percent expansion in the March quarter and beating market expectations of a 3.2 percent expansion. It was the strongest growth since the first quarter of 2013, mainly driven by private consumption while government spending, investment and exports eased.

On the expenditure side, private consumption grew by 3.8 percent in the three months to June 2016, faster than a 2.3 percent increase in the preceding quarter, mainly driven to an increase in expenditure on durable and semi-durable goods. New vehicle purchase by household significantly picked up by a 13.1 percent growth compared to a 2.4 percent contraction in the previous quarter. Rising demand for vehicle was driven by the new car launches and the ongoing incentive promotion campaign, together with higher farm income from both crops and fishery as well as fiscal stimulus package during the Songkran festival.

Government expenditure expanded 2.2 percent, down from a 8.0 percent increase in the previous quarter. The slowdown was largely due to by lower  compensation of employees and purchases of goods and services while  social transfers in kind contracted.

Gross fixed capital formation advanced by 2.7 percent, compared to a 4.9 percent increase. Private investment grew by 0.1 percent from a year earlier (from +2.7 percent in the first quarter) while public investment surged 10.4 percent. 

Exports of goods and services rose 0.6 percent, slowing from a 4.9 percent increase in the first quarter. Imports decreased by 2.2 percent, compared to a 4.7 percent fall in the preceding three months.

On the production side, the non-agricultural sector expanded by 3.7 percent, the same pace as in the March quarter.  In contrast, agriculture sector contracted by 0.1 percent, following a 1.4 percent fall in the previous quarter. Growth in non-agriculture sector was seen for: mining and quarrying (+1.4 percent from +4.7 percent in the previous quarter); manufacturing (+2.0 percent from -0.2 percent); eelectricity, gas and water supply (+6.9 percent from +7.7 percent), construction (+7.5 percent from +11.2 percent); wholesale and retail trade; repair of motor (+5.4 percent from +5.0 percent); hotels and restaurants (+12.7 percent from +15.8 percent);  transport, storage and communication (+4.2 percent from +5.6 percent),  financial intermediation (+4.5 percent from +4.5 percent); real estate services (+2.3 percent from +3.3 percent); public administration and defence (+0.4 percent from +1.3 percent), health and social work (+4.7 percent from +4.9 percent), other community, social and personal service (+11.0 percent from +8.4 percent) and private households with employed persons (+0.4 percent from +1.8 percent). In contrast, a decline was seen for education (-1.5 percent from +0.5 percent). A contraction in agriculture sector was mainly driven by agriculture, hunting and forestry (-1.2 percent) while   fishery expanded by 13.2 percent.

For 2016, the Thailand's economic planning agency (NESDB) projected GDP growth to be at 3.0 to 3.5 percent, unchanged from an earlier forecast. Exports in the year are expected to decline by 1.9 percent, following previous projections of a 1.7 percent drop.

On a quarter-over-quarter seasonally adjusted basis, the GDP grew by 0.8 percent, slowing from an upwardly revised 1.0 percent  expansion in the previous three months and above  consensus of a 0.5 percent expansion.

Considering January to June 2016, the economy grew by 3.4 percent, faster than a 2.8 percent expansion in the same period a year earlier.

Thailand GDP Growth Strongest in Over 3 Years


NESDB l Rida Husna | rida@tradingeconomics.com
8/15/2016 7:13:23 AM