Thailand posted highest growth in six years in 2018
Thailand achieved its most robust economic growth in six years in 2018, posting a 4.1 percent increase for the year as consumers spent beyond expectations during the final quarter.
Thailand bucked the regional trend, with the Asian Development Bank reporting last week that Southeast Asia’s growth rate declined for the first time in three years in 2018. Some countries were hit by external and domestic headwinds that could continue to drag down the regional economy this year.
According to statistics released last week by Thailand’s National Economic and Social Development Council (NESDC), a better-than-forecast 3.7 percent rise in gross domestic product (GDP) during the final three months of 2018 pushed annual growth above 4 percent. Growth in the last quarter was half a percentage higher than in the third quarter.
Several banks and economists have forecast for growth this year in a range of 3.5 percent to 4.5 percent.
Asia Times reported that, “after nearly five years, Thailand’s economic fundamentals are strong across the board. In 2018, Thailand recorded a current account surplus of 7.4 percent of gross domestic product (GDP), equal to $37 billion, and piled up foreign reserves of $202 billion.”
The accumulation of foreign reserves has been driving the uptick in the value of Thailand’s currency, the baht, according to many economists. The baht has increased in value by 4 percent against the dollar over the past year, a sharper rise than any other Asian currency.
That has exporters concerned about the price competitiveness of their goods. While the Thai economy relies on exports for the lion’s share of its revenues, consumption, and investment have begun to play a more significant role than in the past.
The NESDC said that export value grew by 7.7 percent, while private consumption and total investment increased by 4.6 percent and 3.8 percent, respectively. Headline inflation averaged 1.1 percent.
“The economy is picking up a bit,” Charl Kengchn, managing director of Kasikorn Research Center told Asia Times. “Consumption spending was up in the fourth quarter, especially on automobiles, and the election will boost consumption as the political parties canvass and spend cash, but only in the short term.”
Tim Leelahaphan, an economist at Standard Chartered Bank Thai, told the Bangkok Post that his institution remains optimistic on its outlook, forecasting GDP growth of 4.5 percent in 2019.