Thailand Q1 GDP Growth Strongest in 5 Years
Thailand's gross domestic product grew by 4.8 percent year-on-year in the first quarter of 2018, following a 4 percent expansion in the previous period and beating market consensus of 4 percent. It was the strongest growth since the first quarter 2013, as government spending, investment, and private consumption rose at faster paces.
On the expenditure side, government spending went up 1.9 percent, compared with 0.2 percent in Q4, as purchases from enterprises and abroad rose 4.9 percent, fixed capital went up 2.7 percent, and social transfers in kind and compensation of employees increased 1.3 percent and 2.1 percent, respectively. In addition, gross fixed capital formation advanced 3.4 percent, faster than 0.3 percent in Q4. Public investment increased 4 percent, as a result of state enterprise investment (11.6 percent) and private investment grew 3.1 percent, mainly due to a 3.1 percent expansion of investment on machinery. In addition, spending on private construction expanded 3.4 percent.
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Also, private consumption rose 3.6 percent, compared to a 3.4 percent expansion in the prior quarter, mainly due to services, non-durable and semi-durable goods, particulary food and non-alcoholic beverages. However, expenditure on durable goods slowed down, namely motor vehicles. Meanwhile, exports of goods and services went up 6 percent (vs 7.4 percent in Q4) while imports of goods and services rose 9 percent (vs 7.5 percent in Q4).
On the production side, agriculture jumped 6.5 percent, recovering from a 1.3 percent contraction in the December quarter, due to a rebound in both agriculture, hunting and forestry (7.1 percent vs -1.2 percent in Q4) and fishing (0.2 percent vs -2.4 percent). Meanwhile, the non-agricultural sector expanded 4.7 percent, the same as in the previous three-month period. Output grew mainly for: hotels and restaurants (12.8 percent vs 15.3 percent in Q4); wholesale and retail trade (7 percent vs to 6.9 percent); electricity, gas and water supply (2.2 percent vs 3.1 percent); transport, storage and communication (7.1 percent vs 8.8 percent); real estate, renting and business activities (4.5 percent vs 5.8 percent); financial intermediation (3.5 percent vs 3.6 percent); manufacturing (3.7 percent vs 3.4 percent); public administration and defence; education (1.7 percent vs 1.3 percent); health and social work (5 percent vs 3.8 percent), other community, social and personal services (4.7 percent vs 4.1 percent), and rebounded for construction (1.2 percent vs -5.3 percent). On the other hand, a contraction was seen in mining and quarrying (-0.8 percent vs 0.5 percent).
For 2018, the NESDB raises its economic growth forecast to 4.2-4.7 percent from 3.6-4.6 percent.