Third quarter growth highest since 2013
Thailand’s chief planning agency the National Economic and Social Development Board (NESDB) raised its forecast for this year’s economic growth rate to 3.9 percent after statistics released last week showed a 4.3 percent expansion in the third quarter for the highest growth rate for any quarter in four-and-a-half years.
Prospects for the final quarter were also looking bright as the Ministry of Commerce said last week that exports – the most powerful piston in the Kingdom’s economic engine – rose for the eighth straight month, surging by 13.1 percent year-on-year in October, earning $20.1 billion for a total of $195 billion during the first 10 months of the year.
“Exports were higher in every sector because of strong overseas demand as the economies of Thailand’s major trade partners recovered,” said Pimchanok Vonkorpon, director-general of the ministry’s Trade Policy and Strategy Office. Exports to the United States rose by 11 percent in October.
The 4.3 percent gross domestic product (GDP) growth rate in the third quarter was the highest since the first quarter of 2013, and pushed the nine-month growth rate to 3.8 percent year-on-year.Porametee Vimolsiri, NESDB secretary-general, said the main drivers of the third-quarter surge included export growth, continued expansion of private consumption and the recovering manufacturing sector.
Based “on the nine-month performance, the agency expects the economy to possibly expand 3.9 percent for the whole of 2017, up slightly from the average 3.7 percent or range of 3.5-4 percent growth of the previous projection made in August,’’ he added.
With Thailand’s currency, the baht, at its highest level against the dollar in two years, the fact that export growth is still accelerating is a testament to the resilience of the Thai economy. Exports did well across the diverse range of products and categories that Thailand ships: rubber products, tapioca products, frozen and processed foods, fruits, chemical products, cars and parts, electronics, and computers and components.
Pimchanok said that should the U.S. Federal Reserve raise interest rates near the end of the year, as many analysts are forecasting, that should blunt any further rise in the baht and keep Thailand’s products competitively priced.
Imports in October amounted to $19.9 billion, up 13.5 percent year-on-year, giving Thailand a trade surplus of $214 million.
Consumption and private investment, the two other pillars of the economy, also performed well. Consumption increased by 3.1 percent year on year in the third quarter. Private investment rose 2.9 percent.
Government investment actually contracted by 2.6 percent, however, because of delays in spending on state projects. That should be a temporary phenomenon, and as the government’s massive infrastructure upgrade gains pace, government spending should rise, providing another boost to overall growth.