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Thailand GDP growth strongest in 3 years

Staff writer ▼ | May 18, 2016
Thailand’s GDP expanded by 3.2% from a year earlier in the first quarter of 2016, as compared to a 2.8% expansion in the previous quarter and beating market expectations of a 2.8% growth.
Asia   The strong expansion in Thailand
Spending on durable and semi-durable goods slightly increased.
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% in the three month to March 2016, lower than a 2.6% 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%, compared to a 2.0% growth in the December quarter 2015.

Government expenditure expanded by 8.0%, up from a 4.8% 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%, compared to a 9.4% increase.

Private investment grew by 2.1% from a year earlier (from +1.9% in the fourth quarter) while public investment expanded by 12.4% (following a 41.2% rise in the previous three months).

Exports of goods and services rose 5.1%, rebounding from a 3.3% decrease in the fourth quarter 2015. Imports decreased by 4.8%, compared to a 1.2% fall in the preceding three months.

On the production side, the non-agricultural sector expanded by 3.7%, as compared to a 4.2% growth in the December quarter. In contrast, agriculture sector contracted by 1.5%, following a 3.4% fall in the previous quarter.

Growth in non-agriculture sector was seen for: mining and quarrying (+4.8% from +4.0% in the previous quarter); electricity, gas and water supply (+7.3% from +5.0%), construction (+11.2% from +23.9%); and transport, storage and communication (+5.6% from +5.3%).

Growth was eedn for wholesale-retail trades and repairing (+5.1% from +5.5%); financial intermediation (+4.5% from +7.5%); real estate services (+3.0% from +6.6%); hotels and restaurants (+15.8% from +5.0%) and other community, social and personal service (+7.9% from +8.3%).

In contrast, manufacturing production shrank 0.3% (from +0.8%, as a result of slowdown in domestic demand). Meanwhile, a contraction in agriculture sector mainly driven by agriculture, hunting and forestry (-2.5%) while fishery expanded by 9.1%.

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

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