Poll: Thai first quarter growth seen quickening to 1.05pc quarter-on-quarter, but investment weak

A man walks in the business area in Bangkok. ― Reuters pic
A man walks in the business area in Bangkok. ― Reuters pic

BANGKOK, May 17 ― Thai economic growth in January-March was likely faster than in the three previous months on a quarterly basis but the same as in October-December on an annual basis, a Reuters Poll showed, as exports and tourism remained strong but investment slowed.

In the poll of 12 economists, the median for quarterly growth for January-March gross domestic product was a seasonally-adjusted 1.05 per cent compared with the prior three months. Forecasts ranged from 0.7 per cent to 1.4 per cent.

That would be the fastest pace in three quarters and higher than the October-December period's 0.5 per cent.

On an annual basis, growth was seen at 4.0 per cent in the first quarter, according to the poll, the same as October-December.

“Macro data showed economic expansion, albeit not yet broad-based,” said Tim Leelahaphan, economist of Standard Charted. “We expect economic growth momentum to pick up further”.

The poll's median forecast for full-year 2018 growth was 4.0 per cent, fractionally above last year's 3.9 per cent, which was the fastest pace in five years. But the 2017 pace lagged Malaysia's 5.9 per cent and Indonesia's 5.07 per cent.

Southeast Asia's second-largest economy has seen a pick-up, aided by stronger external demand while domestic demand remains soft and investment sluggish.

A slowdown in Thailand's manufacturing activity “bodes ill” for growth in the first quarter, and domestic demand continued to be weak as well, said Prakash Sakpal, economist of ING, who predicted annual growth of 3.6 per cent for the quarter.

In the first quarter, exports ― a key growth driver ― rose about 10 per cent from a year earlier while tourist numbers jumped 15.4 per cent. Private consumption rose 3.3 per cent but investment contracted 0.3 per cent, central bank indexes showed.

In January-March, government investment spending fell by 5 per cent from a year earlier, hit by stricter procurement rules imposed in 2017's second half to combat corruption.

The National Economic and Social Development Board, which compiles GDP data, forecast GDP growth of 3.6-4.6 per cent this year, with exports up 6.8 per cent. It will give new estimates on Monday.

The government expects a record 37.55 million visitors to spend 2.1 trillion baht (RM259.89 billion) this year. Tourism accounts for about 12 per cent of Thailand's economy. ― Reuters

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