Thai Economy Expands Most Since 2013

The Thai economy expanded at the fastest pace in more than four years in the second quarter, largely driven by global demand.

Gross domestic product expanded 3.7 percent on a yearly basis, following the 3.3 percent growth in the previous quarter, the National Economic and Social Development Board said Monday.

Quarter-on-quarter, economic growth held steady at 1.3 percent in the second quarter.

On the expenditure side, private final consumption expenditure grew 3.0 percent, compared to 3.2 percent in the first quarter.

At the same time, general government final consumption expenditure expanded by 2.7 percent and gross fixed capital formation increased slightly by 0.4 percent.

For the external sector, exports and imports of goods and services grew by 6.0 percent and 8.2 percent, respectively.

The production-side breakdown of GDP showed 15.8 percent increase in farm output. Non-agricultural output growth eased to 2.7 percent from 3.1 percent as manufacturing sector slowed down, while tourism showed an upward trend.

In the first half of 2017, GDP expanded 3.5 percent.

Citing recovery of the exports, robust investment and the favorable expansion of household income, the government upgraded its growth outlook for whole year of 2017 to 3.5-4 percent, from the previous forecast of 3.3-3.8 percent.

It is expected that the export value of goods will expand by 5.7 percent, private consumption and total investment will grow by 3.2 and 3.4 percent, respectively.

The headline inflation will be in the range of 0.4-0.9 percent and the current account will record a surplus of 9.7 percent to GDP, the board said.

Gareth Leather, Capital Economics' economist said growth is likely to remain relatively strong over the next couple of quarters, helped by strong external demand and loose monetary and fiscal policy.

The uncertain political situation is the main risk to the outlook, the economist added.