Monday November 21 2016
Thailand Economy Expands 0.6% QoQ in Q3
Chusnul | chusnul@tradingeconomics.com

The Thai economy grew by 0.6 percent quarter-on-quarter in the three months to September of 2016, compared to a downwardly revised 0.7 percent expansion in the previous three months. The figure came in below expectations of a 0.7 percent expansion to hit the weakest growth rate since the June quarter of 2015. Private consumption slowed and exports rebounded while government spending contracted.

In the September quarter, private investment expanded 0.4 percent, accelerating from a 1.9 percent growth in the June quarter. In contrast, government spending shrank 5.3 percent, following a 4.4 percent contraction in the preceding quarter. Gross fixed capital formation decreased by 2.9  percent, after registering a 3.7 percent decline in the previous quarter. Exports of goods and services rose 1.2 percent, compared to a 2.1 percent contraction in the previous three months. In contrast, imports of goods and services went donw by 0.2 percent, following a 1.3 percent rise  in the preceding quarter.

On the production side, wholesale and retail trade, repair of motor rose (+1.3 percent from +1.1 percent) and financial intermediation (+0.6 percent from +1.62 percent). In contrast, agriculture fell (-0.1 percent from -1.0 percent), manufacturing (-0.1 percent from +1.2 percent), 

Year-on-year, the country's GDP expanded 3.2 percent from a year earlier in the September quarter of 2016, compared to a 3.5 percent expansion in the second quarter and market expectations of a 3.4 percent growth.




Monday November 21 2016
Thailand GDP Growth Below Estimates in Q3
NESDB l Rida Husna | rida@tradingeconomics.com

Thailand’s gross domestic product expanded 3.2 percent from a year earlier in the third quarter of 2016, compared to a 3.5 percent expansion in the previous period and market expectations of a 3.4 percent growth. Private consumption, investment and exports were the main drivers of growth while government spending declined sharply.

In the three months to September, private consumption grew by 3.5 percent, compared to a 3.8 percent increase in the preceding quarter. While expenditure on durable and non-durable goods, particularly for vehicles and furniture purchased by households eased, spending on semi-durable goods declined. 

Gross fixed capital formation advanced by 1.4 percent (from +3.2 percent in the June quarter). Public investment rose 6.3 percent (from +11.9 percent).

Exports grew by 3.4 percent, following a 2 percent increase in the June quarter. Imports fell 1.3 percent (from -1.6 percent).

In contrast, government spending shrank 5.8 percent (from +1.5 percent).

On the production side, the non-agricultural sector expanded by 3.2 percent, slowing from a 3.8 percent increase in the June quarter, Agriculture sector also grew  by 0.9 percent, following a 1.2 percent fall in the previous quarter. Growth in non-agriculture sector was seen for: mining and quarrying (+2.9 percent from +1.5 percent in the previous quarter); manufacturing (+0.9 percent from +2.1 percent); electricity, gas and water supply (+6.1 percent from +7.2 percent), construction (+5.0 percent from +7.8 percent); wholesale and retail trade; repair of motor (+5.5 percent from +5.5 percent); hotels and restaurants (+15.9 percent from +12.7 percent);  transport, storage and communication (+6.4 percent from +4.4 percent), financial intermediation (+4.4 percent from +4.6 percent); real estate services (+1.8 percent from +2.8 percent);  health and social work (+1.9 percent from +5.2 percent), other community, social and personal service (+10.3 percent from +10.5 percent) and private households with employed persons (+2.4 percent from +1.4 percent). In contrast, a decline was seen for: public administration and defence (-3.4 percent from +0.1 percent), education (-2.4 percent from -1.6 percent). 

For 2016, the Thailand's economic planning agency (NESDB) projected the economy to advance 3.2 percent, compared to a previous forecast range of 3.0 to 3.5 percent. Exports in the year are expected to be flat, following earlier projections of a 1.9 percent drop.

On a quarter-over-quarter seasonally adjusted basis, the GDP grew by 0.6 percent, compared to a downwardly revised 0.7 percent expansion in the previous three months. It was the weakest growth since the June quarter 2015 and slightly below market consensus of a 0.7 percent expansion.

For 2017, GDP is projected to expand between 3.0 to 4.0 percent while exports rose 2.4 percent.

In 2015, the economy grew by 2.8 percent.




Wednesday November 09 2016
Thailand Holds Key Rate Steady at 1.5%
Bank of Thailand l Rida Husna | rida@tradingeconomics.com

The Bank of Thailand left unanimously its benchmark interest rate unchanged at 1.5 percent on November 9th, as widely expected. Policymakers said the economy remained on a recovery path with uncertainties stemming from political developments in the US and Europe. At the same time, concerns over the European and Chinese financial sectors continued to warrant close monitoring.

Statement by the Bank of Thailand: 

The Committee assessed that the Thai economy continued to expand at a pace close to the previous assessment despite greater downside risks on both domestic and external fronts. Inflation was expected to increase but might return to the target later than expected due to supply-side factors. Meanwhile, monetary conditions remained accommodative and conducive to the economic recovery. Hence, the Committee decided to keep the policy rate unchanged at this meeting.

The Thai economy was projected to recover at a pace close to the previous assessment. Exports of industrial goods expanded more than expected, while private investment remained low despite some improvements seen in certain export-oriented manufacturing sectors. At the same time, tourism was expected to slow down as a result of the government’s measures to curb zero-dollar tours. Private consumption continued to expand although some activities might slow down temporarily. Public expenditure continued to be an important growth driver. Overall, under the Committee’s assessment, the Thai economy remained on a recovery path, but downside risks increased from the number of Chinese tourists that could turn out to be lower than the previous projection as well as uncertainties stemming from political developments in the US and Europe. Meanwhile, concerns over the European and Chinese financial sectors continued to warrant close monitoring.

Headline inflation in October softened slightly on account of fresh food prices, while core inflation remained stable around the previous assessment. The Committee expected that headline inflation would rise slowly and might return to the target later than previously projected, depending on fresh food prices as well as global oil price developments which remained largely uncertain. Nevertheless, headline inflation was still expected to gradually pick up, while the public’s medium-term inflation expectationsremained close to the inflation target.

Overall monetary conditions remained accommodative and conducive to the economic recovery as reflected in low real interest rates and government bond yields. Nonetheless, the baht appreciated against key trading partner currencies which might not be beneficial to the ongoing economic recovery. In addition, financial stability remained sound and able to provide cushion against potential shocks and volatilities in financial markets.
However, there remained pockets of risks that warranted close monitoring, such as the deterioration in loan quality of some business sectors and the search-for-yield behavior under the prolonged low interest rate environment.

The Committee saw the need to preserve policy space given that the Thai economy would still be facing greater uncertainties going forward, particularly the fragile global economic recovery and uncertainties in the monetary policy directions of major advanced economies that might induce greater capital flow and exchange rate volatility. 

Going forward, the Committee viewed that monetary policy should remain accommodative, and stands ready to utilize an appropriate mix of available policy tools in order to ensure that monetary conditions are conducive to the economic recovery, while ensuring financial stability.




Wednesday September 14 2016
Thailand Holds Rates Steady at 1.5%
Bank of Thailand l Joana Ferreira | joana.ferreira@tradingeconomics.com

The Bank of Thailand left its benchmark interest rate unchanged at 1.5 percent on September 14th, as widely expected, saying the economy is expected to recover at a gradual pace, while facing uncertainties on both domestic and external fronts. Thailand’s economy grew a higher-than-expected 3.5 percent in the second quarter of the year, but the country still faces a number of challenges including low private investment amid a drop in exports and manufacturing production.

Statement by the Bank of Thailand:

In deliberating their policy decision, the Committee assessed the economy to continue recovering at a gradual pace, while facing uncertainties on both domestic and external fronts. Inflation was expected to return to the target band within the latter half of the year. Meanwhile, monetary conditions remained accommodative and conducive to the economic recovery. Hence, the Committee judged that the policy rate should be kept on hold at this meeting.

The Thai economy recorded higher-than-expected growth in the second quarter on the back of a strong expansion in private consumption, partly as a result of temporary factors and government stimulus measures. Meanwhile, public expenditure and tourism continued to be the key growth drivers. Nonetheless, private investment remained low and mostly concentrated in some business sectors. Manufacturing production and merchandise exports contracted due to the slowdown in Asian economies and structural problems facing the Thai economy. In addition, there was a decline in the quality of loans extended to some business sectors. Looking ahead, the Committee projected that the Thai economy would continue to recover but face risks, particularly those stemming from the fragile global economic recovery and political developments abroad.

Headline inflation in August increased slightly on account of fresh food prices, while core inflation remained stable in line with the gradual recovery in demand. The Committee expected headline inflation to return to the target band within this year as previously assessed.

Overall monetary conditions remained accommodative as reflected in low real interest rates and government bond yields. Nonetheless, the baht appreciated against key trading partner currencies over some recent periods which might not be beneficial to the ongoing economic recovery. In addition, financial stability risks from the prolonged low interest rate environment, including search-for-yield behavior, continued to warrant close monitoring.

The Committee saw the need to preserve policy space given that the Thai economy would still be facing greater uncertainties going forward, particularly the fragile global economic recovery and uncertainties in the monetary policy directions of major advanced economies that might induce greater capital flow and exchange rate volatility.

Going forward, the Committee viewed that monetary policy should remain accommodative, and stands ready to utilize an appropriate mix of available policy tools in order to ensure that monetary conditions are conducive to the economic recovery, while ensuring financial stability.


Monday August 15 2016
Thailand Economy Expands 0.8% QoQ in Q2
NESDB l Rida Husna | rida@tradingeconomics.com

The Thai economy grew by 0.8 percent on a quarter-on-quarter seasonally adjusted basis in the second quarter of 2016, compared to an upwardly revised 1.0 percent growth in the previous quarter and above market consensus of a 0.5 percent expansion. A sharp increase in private consumption were unable to offset a decline in government spending, investment and exports.

In the June quarter, private investment expanded 1.9 percent, accelerating from a 0.9 percent growth in the March quarter. In contrast, government spending shrank 3.6 percent, following a 0.6 percent growth in the preceding quarter. Gross fixed capital formation decreased by 3.3  percent, after registering a 4.5 percent expansion in the previous quarter. Exports of goods and services fell 3.3 percent, compared to a 4.5 percent growth in the previous three months. In contrast, imports of goods and services went up by 0.8 percent, following a 2.8 percent decline in the preceding quarter.

On the production side, all sectors in the economy expanded: agriculture (+1.9 percent from -1.0 percent), manufacturing (+1.2 percent from -0.5 percent), wholesale and retail trade, repair of motor (+1.0 percent from +0.9 percent) and financial intermediation (+1.7 percent from -0.2 percent).

Year-on-year, the country's GDP expanded  3.5 percent from a year earlier, as compared to a 3.2 percent expansion in the previous quarter and beating market expectations of a 3.2 percent expansion. It iwas the strongest growth since the March quarter of 2013.


Monday August 15 2016
Thailand GDP Growth Strongest in Over 3 Years
NESDB l Rida Husna | rida@tradingeconomics.com

Thailand’s GDP expanded 3.5 percent from a year earlier in the second quarter of 2016, compared to a 3.2 percent expansion in the March quarter and beating market expectations of a 3.2 percent expansion. It was the strongest growth since the first quarter of 2013, mainly driven by private consumption while government spending, investment and exports eased.

On the expenditure side, private consumption grew by 3.8 percent in the three months to June 2016, faster than a 2.3 percent increase in the preceding quarter, mainly driven to an increase in expenditure on durable and semi-durable goods. New vehicle purchase by household significantly picked up by a 13.1 percent growth compared to a 2.4 percent contraction in the previous quarter. Rising demand for vehicle was driven by the new car launches and the ongoing incentive promotion campaign, together with higher farm income from both crops and fishery as well as fiscal stimulus package during the Songkran festival.

Government expenditure expanded 2.2 percent, down from a 8.0 percent increase in the previous quarter. The slowdown was largely due to by lower  compensation of employees and purchases of goods and services while  social transfers in kind contracted.

Gross fixed capital formation advanced by 2.7 percent, compared to a 4.9 percent increase. Private investment grew by 0.1 percent from a year earlier (from +2.7 percent in the first quarter) while public investment surged 10.4 percent. 

Exports of goods and services rose 0.6 percent, slowing from a 4.9 percent increase in the first quarter. Imports decreased by 2.2 percent, compared to a 4.7 percent fall in the preceding three months.

On the production side, the non-agricultural sector expanded by 3.7 percent, the same pace as in the March quarter.  In contrast, agriculture sector contracted by 0.1 percent, following a 1.4 percent fall in the previous quarter. Growth in non-agriculture sector was seen for: mining and quarrying (+1.4 percent from +4.7 percent in the previous quarter); manufacturing (+2.0 percent from -0.2 percent); eelectricity, gas and water supply (+6.9 percent from +7.7 percent), construction (+7.5 percent from +11.2 percent); wholesale and retail trade; repair of motor (+5.4 percent from +5.0 percent); hotels and restaurants (+12.7 percent from +15.8 percent);  transport, storage and communication (+4.2 percent from +5.6 percent),  financial intermediation (+4.5 percent from +4.5 percent); real estate services (+2.3 percent from +3.3 percent); public administration and defence (+0.4 percent from +1.3 percent), health and social work (+4.7 percent from +4.9 percent), other community, social and personal service (+11.0 percent from +8.4 percent) and private households with employed persons (+0.4 percent from +1.8 percent). In contrast, a decline was seen for education (-1.5 percent from +0.5 percent). A contraction in agriculture sector was mainly driven by agriculture, hunting and forestry (-1.2 percent) while   fishery expanded by 13.2 percent.

For 2016, the Thailand's economic planning agency (NESDB) projected GDP growth to be at 3.0 to 3.5 percent, unchanged from an earlier forecast. Exports in the year are expected to decline by 1.9 percent, following previous projections of a 1.7 percent drop.

On a quarter-over-quarter seasonally adjusted basis, the GDP grew by 0.8 percent, slowing from an upwardly revised 1.0 percent  expansion in the previous three months and above  consensus of a 0.5 percent expansion.

Considering January to June 2016, the economy grew by 3.4 percent, faster than a 2.8 percent expansion in the same period a year earlier.


Wednesday August 03 2016
Thailand Holds Key Interest Rate at 1.5%
Bank of Thailand l Joana Ferreira | joana.ferreira@tradingeconomics.com

The Bank of Thailand kept its benchmark interest rate unchanged at 1.5 percent on August 3rd, as widely expected, saying the current monetary policy is adequate to support the economic recovery while inflation is now expected to return to the target band later than previously estimated due to weaker-than-expected energy prices. Policymakers voiced concerns about the fragile global economic recovery and uncertainties in the monetary policy directions of major advanced economies that might induce greater capital flow and exchange rate volatility.

Statement by the Bank of Thailand:

In deliberating their policy decision, the Committee assessed the economy to continue recovering at a gradual pace despite facing greater downside risks from increased uncertainties in the global economy. Meanwhile, inflation might return to the target band slightly later than previously assessed due to weaker-than-expected energy prices. Monetary conditions remained accommodative and conducive to the economic recovery. Hence, the Committee judged that the policy rate should be kept on hold at this meeting.

The Thai economy continued to recover at a gradual pace driven mainly by public expenditure and tourism. Private consumption also expanded on the back of improvements in income and confidence of agricultural households. Nevertheless, private investment remained low, and merchandise exports still contracted due to weaker-than-expected demand from Asian economies. Overall, the Thai economy was projected to expand at the rate close to the previous assessment, although downside risks increased from the last meeting. These included uncertainties following the British referendum (‘Brexit’), concerns over the European financial sector, and political developments abroad, which could impact confidence and the economic outlook of trading partners going forward. Meanwhile, financial stability risks in China remained.

Headline inflation in July softened slightly on account of raw food prices, while core inflation remained stable. The Committee expected that headline inflation would still gradually rise, although the timing of its return to the target band might be delayed, depending on global oil price movements.

The Committee viewed that overall monetary conditions remained accommodative and conducive to the economic recovery. This was reflected in low real interest rates and a continued expansion in total corporate financing and household credits, although certain business sectors faced limitations in obtaining credits. Nonetheless, the baht appreciated against some major currencies over the recent period, which might not be beneficial to the ongoing economic recovery. In addition, financial stability risks from the prolonged low interest rate environment, including search-for-yield behavior, continued to warrant close monitoring.

The Committee saw the need to preserve policy space given that the Thai economy would still be facing more uncertainties going forward, particularly the fragile global economic recovery, and uncertainties in the monetary policy directions of major advanced economies that might induce greater capital flow and exchange rate volatility.

Going forward, the Committee viewed that monetary policy should remain accommodative, and stands ready to utilize an appropriate mix of available policy tools in order to ensure that monetary conditions are conducive to the economic recovery, while ensuring financial stability.


Wednesday June 22 2016
Thailand Holds Key Rate at 1.5%
Bank of Thailand l Joana Ferreira | joana.ferreira@tradingeconomics.com

The Bank of Thailand left its benchmark interest rate on hold at 1.5 percent on June 22nd, as widely expected, saying the current monetary policy is adequate to support the economic recovery and to bring inflation back to the target band within the latter half of the year. Policymakers, however, voiced concerns about the fragile global economic recovery, monetary policy divergence among major advanced economies, the result of the EU Referendum in the UK and financial stability in China.

Statement by the Bank of Thailand:

In deliberating monetary policy, the Committee judged that the economy would continue to recover, and inflation would return to the target band within the latter half of the year as previously expected. Meanwhile, monetary conditions remained accommodative and conducive to the economic recovery. Hence, the policy rate should be kept on hold at this meeting.

The Thai economy continued to recover on the back of public expenditure and broad-based improvement in the tourism sector, while private consumption expanded as anticipated. However, expansion in private investment remained low, and merchandise exports still contracted in tandem with other Asian economies which were weaker than expected. Overall, the economic momentum from domestic demand and the tourism sector offset the impact from contraction in merchandise exports. As such, the economy was expected to expand at the same rate as previously assessed. Nevertheless, there are remaining downside risks from slower-than-expected growth of trading partners, and private sector’s confidence which is still fragile. However, concerns pertaining to the impact of the drought have subsided, and prices of some agricultural commodities have shown sign of recovery.

Inflationary pressure edged up with the ongoing economic recovery. Headline inflation in May picked up further with the acceleration in energy and fresh food prices, while core inflation increased slightly. The Committee assessed that headline inflation would gradually rise and return to the target band within the latter half of this year.

Monetary conditions remained accommodative and conducive to the economic recovery as reflected in low real interest rates. Total corporate financing and household credits continued to expand, although certain business sectors faced limitations in obtaining credits. Meanwhile, financial stability risks from the prolonged low interest rate environment, including search-for-yield behavior, continued to warrant close monitoring.

The Committee saw merit in preserving policy space given that the Thai economy would still be facing risks going forward, such as the fragile global economic recovery, monetary policy divergence among major advanced economies, the result of the EU Referendum in the UK (‘Brexit’) and financial stability concerns in China. Going forward, the Committee viewed that monetary policy should remain accommodative, and stands ready to utilize an appropriate mix of available policy tools in order to ensure that monetary conditions are conducive to the economic recovery, while ensuring financial stability.


Monday May 16 2016
Thai Economy Expands 0.9% QoQ in Q1
NESDB l Rida Husna | rida@tradingeconomics.com

The Thai economy grew by 0.9 percent on a quarter-on-quarter seasonally adjusted basis in the March quarter of 2016, compared to a 0.8 percent growth in the previous quarter and above market consensus of a 0.6 percent expansion, mainly supported by private consumption and net exports while government expenditure and investment slowed.

In the first quarter, private investment expanded by 0.8 percent, accelerating from a 0.1 percent growth in the December quarter. Government spending rose 1.2 percent, following a 4.0 percent growth in the December quarter. Gross fixed capital formation increased by 2.0  percent, after registering a 7.2 percent expansion in the previous quarter. Exports of goods and services rose 4.9 percent, faster than a 0.6 percent growth in the previous three months. Imports of goods and services fell 3.2 percent after remaining unchanged in the preceding quarter.

On the production side, wholesale and retail trade, repair of motor grew by 1.1 percent (from +2.3 percent in the last quarter of 2015). In contrast, agriculture sector contracted by 1.3 percent (from +2.1 percent). Manufacturing sector also shrank by 0.8 percent (after a 0.2 percent growth). Menawhile, financial intermediated remained unchanged in the first quarter 2016, compared to a 2.2 percent growth in the previous three months.

Year-on-year, the country's GDP expanded by 3.2 percent from a year earlier, as compared to a 2.8 percent expansion in the previous quarter and beating market expectations of a 2.8 percent expansion. It is the strongest growth since the March quarter of 2013.


Monday May 16 2016
Thailand GDP Growth Strongest in 3 Years
NESDB l Rida Husna | rida@tradingeconomics.com

Thailand’s GDP expanded by 3.2 percent from a year earlier in the first quarter of 2016, as compared to a 2.8 percent expansion in the previous quarter and beating market expectations of a 2.8 percent growth. It is the strongest expansion since the March quarter of 2013, mainly driven by government spending and net exports while private consumption and investment eased.

On the expenditure side, private consumption grew by 2.3 percent in the three month to March 2016, lower than a 2.6 percent increase in the preceding quarter. The slowdown was partly due to a faded-off effect after the expedited spending driven by fiscal stimulus package and persistently low farm income. Spending on durable and semi-durable goods slightly increased, while non-durable consumption showed better growth. Meanwhile, service expenses increased by 0.4 percent, compared to a 2.0 percent growth in the December quarter 2015. Government expenditure expanded by 8.0 percent, up from a 4.8 percent increase in the previous quarter, contributed by high purchases of goods and services and social welfare benefit. In addition, compensation of employees still increased. Gross fixed capital formation advanced by 4.7 percent, compared to a 9.4 percent increase. Private investment grew by  2.1 percent from a year earlier (from +1.9 percent in the fourth quarter) while public investment expanded by 12.4 percent (following a 41.2 percent rise in the previous three months). Exports of goods and services rose 5.1 percent, rebounding from a 3.3 percent decrease in the fourth quarter 2015. Imports decreased by 4.8 percent, compared to a 1.2 percent fall in the preceding three months.

On the production side, the non-agricultural sector expanded by 3.7 percent, as compared to a 4.2 percent growth in the December quarter.  In contrast, agriculture sector contracted by 1.5 percent, following a 3.4 percent fall in the previous quarter. Growth in non-agriculture sector was seen for: mining and quarrying (+4.8 percent from +4.0 percent in the previous quarter); eelectricity, gas and water supply (+7.3 percent from +5.0 percent), construction (+11.2 percent from +23.9 percent); transport, storage and communication (+5.6 percent from +5.3 percent); wholesale-retail trades and repairing (+5.1 percent from +5.5 percent); financial intermediation (+4.5 percent from +7.5 percent); real estate services (+3.0 percent from +6.6 percent); hotels and restaurants (+15.8 percent from +5.0 percent) and other community, social and personal service (+7.9 percent from +8.3 percent). In contrast, manufacturing  production shrank 0.3 percent (from +0.8 percent, as a result of slowdown in domestic demand). Meanwhile, a contraction in agriculture sector mainly driven by  agriculture, hunting and forestry (-2.5 percent) while   fishery expanded by 9.1 percent.

For 2016, the Thailand's economic planning agency (NESDB) projected the GDP to be at 3.0 to 3.5 percent, compared to earlier forecasts in February at 2.8 to 3.8 percent. Exports in the year are expected to decline by 1.7 percent, following previous projections  at  a 1.2 percent increase.

On a quarter-over-quarter seasonally adjusted basis, the GDP expanded by 0.9 percent from a 0.8 percent  growth in the previous three months and above  consensus of  0.6 percent.