The Thai economy expanded by 3.7% year-on-year in the second quarter of 2017, accelerating from 3.3% in the previous quarter and posting its fastest growth in four years, according to figures from the National Economic and Social Development Board (NESDB).
Economic growth was spurred by stronger exports and improved performance by the tourism and agricultural sectors. On a quarter-on quarter seasonally adjusted basis, the economy expanded by 1.3% in the period April-June of the current year.
On the expenditure side, economic growth was driven by higher exports of goods and services, stronger private consumption, and the rebound in private investment even as public investment declined.
Exports accelerated as the economies of key trading partners (U.S., EU, China, and Japan) improved and world commodity prices increased. Thailand’s export value in 2Q 2017 was recorded at US$56.1 billion, representing an 8.0% growth, the highest growth rate in 18 quarters. Export volume increased by 5.1%, and export prices rose by 2.8%, with crude oil, refined fuels, chemicals, rubber, and sugar showing the biggest price hikes.
In the first half of 2017, export value increased by 7.4% in dollar terms.
Exports of agricultural commodities expanded at a high rate of 19.2% in the second quarter, the third consecutive quarter of growth, said NESDB.
Manufacturing products expanded with the highest rate in 18 quarters by 12.5% and the sector has continued to accelerate for four consecutive quarters. Fishery products increased by 10.4%, while exports of other products decreased by 44.3%.
Export items with increased value included rubber, rice, sugar, rubber products, telecommunication equipment, vehicle parts and accessories, and petroleum products. On the other hand, export items with decreased value included passenger cars, air-conditioning machines, and tapioca.
Exports to the U.S., EU 15, China, Japan and ASEAN expanded, while exports to Australia and the Middle East declined.
As for the production side, growth accelerated for the agricultural, wholesale and retail trade, hotel and restaurant, and transportation and communication sectors, while that of the manufacturing sector slowed down.
On the outlook for 2017, the board forecasts the Thai economy to grow by 3.5% to 4.0%, supported by the recovery of exports in tandem with the pickup in world economy and world trade volume, the stronger expansion of both public and private investment in the latter half of the year, acceleration of key production sectors, and favorable expansion of household income which will continue to support private consumption.
The export value of goods is seen to grow by 5.7%, while private consumption and total investment are predicted to rise by 3.2% and 3.4%, respectively.
But NESDB warns of downside risks to the forecast coming from natural disasters, especially floods, as well as from economic and political uncertainties in major trading partners and from higher volatility in global commodity prices, all of which could lead to a slower-than-expected recovery for Thailand. In addition, the appreciation pressure on Thai baht is anticipated to persist for the rest of the year.
Photo: Peter van der Sluijs
