Growth forecast raised on robust first quarter results
Shipments of durian, Thailand’s famous fruit, contributed to a sweet surge in exports that prompted the Ministry of Finance to raise its full-year growth forecast for the economy to 4.5 percent following a first quarter expansion of 4.8 percent, the fastest quarterly pace in five years.
The ministry cited the Kingdom’s robust exports as the main factor in raising its projection from its earlier estimate of 4.2 percent. Exports rose for the14th straight month in April with an increase of 12.3 percent year on year, while shipments for the entire first quarter were up 11.3 percent, the highest rate in seven years. Total shipments for the quarter were valued at $81.77 billion. The ministry said its forecast for the economy was dependent upon full-year export growth of 8 percent.
April’s impressive export figures could be attributed in part to the pungent durian fruit, with China’s appetite soaring for spiky-skinned delicacy. The Middle Kingdom’s imports of durian rose 774 percent in April to over 56,000 tons, equaling half of all Thai durian exports. Overall shipments of durian rose 135 percent in April to 120,000 tons, up 207 percent over the same month last year.
The deluge of durians helped propel a total increase in agricultural and agro-industrial exports of 8.9 percent year on year in April, after a contraction of 3.3 percent in March.
Thailand’s resilience is a result of its diverse menu of exports, and industrial exports have also been star performers. In line with overall exports, industrial exports powered higher for the 14th straight month, rising 12.2 percent in April to $4.78 billion. Finished oil products, plastic pellets, computers and components, and automobiles and parts were the leaders.
The Kingdom’s appetite for imports also increased. During the first quarter, imports were up 17.2 percent to $81.1 billion, leaving Thailand with a modest trade surplus of $673 million for the period.
Finance Ministry spokeswoman Kulaya Tantitemit said the main external threats to Thailand’s growth had recently receded, as the likelihood of a U.S.-China trade war was declining, and tensions appeared to be diminishing on the Korean peninsula.
The ministry also expects that investment, another important economic driver, will be positive this year. Government investment is forecast to rise 10 percent, higher than the ministry’s previous forecast of 8.9 percent. Private investment is projected to increase by 3 percent; a figure the government feels is too low. Rising business confidence indices have yet to be matched by funding commitments.