Thai Growth Remained Strong, Q4 Official GDP Estimate Between 12-14%
Imports continue to rise in Thailand, with private investments continue to channel foreign funds into Thailand, potentially appreciating the Baht further. Unlike HKMA, Thailand does not appear to be fighting against the rising Baht, which is currently trading only 0.50 Baht away from the 30.20 low against the USD.
Domestic consumption and investments remained strong and supported the economy in the third quarter, during which period gross domestic product is predicted to have expanded by between 3.5 and 4 per cent year on year, the Finance Ministry said yesterday.
The ministry did, however, express concern about export prospects for the remainder of the year.
GDP is expected to grow by 12-14 per cent in the current quarter, partly because of last year's low fourth-quarter base, when the economy contracted 8.9 per cent as a result of the devastating floods, Kulaya Tantitemit, the Fiscal Policy Office's senior expert on macroeconomic policy, said during a press conference on the ministry's monthly and quarterly economic report.
“The economic situation in September and the third quarter was driven by domestic consumption and private investment, amid a slowing down of exports and export-oriented manufacturing resulting from the weakening global economy,” she said.
However, exports to “new” markets such as Africa, Australia, India and Hong Kong expanded, she added.
With Thai consumers continuing to spend last month, there was 32.6-per-cent growth in the collection of value-added tax year on year, and a 20.2-per-cent rise in the third quarter.
Car sales soared 67.8 per cent year on year last month and 78.6 per cent in the quarter, indicating robust consumer spending, Kulaya said.
Meanwhile, imports of capital goods increased 24.5 per cent in September and 18.3 per cent in the quarter, suggesting a continual rise in private investment. Commercial-vehicle sales also rose, by 39.4 per cent year on year last month and 53.5 per cent in the third quarter, she said.
The weak global economy resulted in a 3.8-per-cent export contraction in the July-to-September period. It also caused the Industrial Production Index to shrink 13.7 per cent last month, for the fourth month in row. The index also dropped by 10.2 per cent in the third quarter compared with the previous three months.
“Key factors that will significantly impact on the economy for the rest of the year and next year include the ongoing crisis in Europe and the fiscal-cliff issue in the United States, both of which will affect Thai exports,” she said.
The Fiscal Policy Office now forecasts a GDP growth rate of 5.5 per cent for this year, and 5.2 per cent for next year.
To achieve growth of 5.5 per cent, exports must expand 24.8 per cent in the current quarter, or by about US$20 billion (Bt61.5 billion) per month, Kulaya said.
Every percentage point of export decline will slash GDP growth by 0.7 percentage point, she said, adding that the economy had expanded 2.2 per cent in the first half of the year.
Government spending in the third quarter supported economic growth, with the outlay exceeding the level of tax receipts, the Fiscal Policy Office said.
Government budget disbursement last month was Bt227 billion, for a 17.5-per-cent rise year on year, and Bt566 billion in the third quarter, up 17.9 per cent.
Government revenue, after allocations to support local governments, rose 18.5 per cent to Bt122.8 billion last month, and by 8 per cent to Bt545.7 billion in the third quarter.
The government had a fiscal surplus of Bt28.6 billion last month, but a deficit of Bt26.9 billion between July and September, the office reported.
Via – Nationmultimedia
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