2017年 09月 01日

Thailand’s economic growth set to accelerate

Solid growth in exports, combined with a gradual improvement in domestic demand, has prompted an upward revision of Thailand’s economic growth by the central bank from 3.4% to 3.5% for this year, and to 3.7% in 2018.

On July 5 the monetary policy committee of the Bank of Thailand (BOT) announced it was revising its forecast for GDP growth from 3.4% to 3.5% for this year, and to 3.7% in 2018, up from its earlier projections of 3.6%.

Thailand’s economic outlook improved in the second quarter, the bank said in a statement. It noted there were prospects for even better trade figures in the second half of 2017, citing expansion in merchandise exports across many product categories and destinations, as well as a recovery in tourism.

Private consumption, boosted by improvements in farm income, is projected to grow by a steady 3.1% through this year, maintaining the same rate in 2018.

Exports were also a significant factor in higher levels of private investment, according to the BOT, which reported that private investment grew by 1.7% in the year to June, up on 0.4% for the whole of 2016, driven largely by investments in export-oriented manufacturing segments.

Public investment, meanwhile, is forecast to grow by 7.7% this year, before rising by 9.2% in 2018, with government spending set to remain a driving force in the economy, despite some ongoing bottlenecks in project delivery.

Headline inflation could see an uptick in the second half of the year, supported by supply-side factors and continued recovery in domestic demand. Following a negative inflation rate in both May and June, the BOT expects the consumer price index to rise by 0.8% this year, climbing to 1.6% in 2018 – within its medium-term target of 2.5% with a band of 1.5% on either side.

While continuing to monitor factors such as appreciation of the Thai baht and short-term capital inflows, the central bank said it intends to maintain an accommodative monetary policy, and kept its key policy rate at 1.5%.

Economists forecast stronger growth, steady interest rates. In early July Kasikorn Research Centre also revised its forecast for the Thai economy, raising its projections for GDP expansion from 3.3% to 3.4%.

With growth in the first half of 2017 higher than expected, thanks to solid exports and private consumption, the economic research group said this momentum should be carried through to the end of the year.

The centre also forecast that the BOT would keep its key policy rate at 1.5% for the rest of this year, with little in the way of inflationary pressure to necessitate any increase.

The forecasts of both the BOT and Kasikorn align with projections from the Asian Development Bank, which expects the Thai economy to grow by 3.5% this year.