Thailand: Analysts expect growth to match central bank figures

• Feb 15, 2017

Thai economic growth in the fourth quarter of 2016 is expected to be slower than the previous quarter’s 3.2% year-on-year growth, but most economists polled see 2016’s growth achieving the Bank of Thailand’s 3.2% forecast.
Southeast Asia’s second-largest economy was expected to grow 2.8% during the three months to December, lower than the annual 3.2% gain in the preceding quarter, mainly due to the government regulation to curb illegal tour operations and the mourning period after the passing of King Bhumibol Adulyadej, said Sarun Sunansathaporn, an economist at the Bank of Ayudhya (BAY) research department.
The high base effect in the final quarter of 2015, driven by the record number of tourist arrivals and the government’s tax break for shopping during the festive season, was also blamed for the lower GDP growth in the fourth quarter of last year, he said.
“The holiday tax break measure and heavy government spending were expected to partially offset the tepid consumption in the fourth quarter,” he said.
Fourth-quarter GDP expanded 0.5% quarter-on-quarter with seasonally adjusted growth, thanks to the strong export rebound in the final two months of last year, he said.
Thailand’s exports rose for a second straight month in December, enabling shipping in 2016 to eke out a marginal growth of 0.45% in 2016, ending three years of contractions.
Outbound shipments rose 6.23% year-on-year in December to UScopy8.2 billion (641 billion baht) after unexpectedly surging 10.2% year-on-year in November to copy8.9 billion, according to the Commerce Ministry.
Mr Sarun predicts private investment will remain sluggish in the fourth quarter of 2016.
The bank expects the Thai economy to fare better this year with a broader-based recovery as higher investment is expected to be seen after the recovery in exports.
BAY expects the Thai economy to grow 3.2% in 2016 and 3.3% in 2017. For the first nine months of 2016, the Thai economy registered 3.3% growth.
The National Economic and Social Development Board (NESDB) is due to announce the fourth-quarter economic data on Feb 20.
Amornthep Chawla, head of research at CIMB Thai Bank (CIMBT), said the bank expects the Thai economy grew 3.1% year-on-year and 0.8% quarter-on-quarter in the fourth quarter of 2016.
Growth in merchandise exports, the strong tourism sector and government measures to ramp up spending late last year were seen to contribute to growth during the quarter, he said.
Private consumption was expected to grow quarter-on-quarter during the final three months of last year as higher farm incomes following the rise in agricultural product prices likely negated the effects of a slowdown in entertainment spending.
The government tax breaks for shopping late last year would have also lent support to consumption in the fourth quarter even though it will steal demand from the following quarter, he added.
Mr Amornthep said tourist arrivals had contracted year-on-year for the four months starting from September last year, but recovery has already been spotted in the sector.
“The figure I want to focus in the NESDB’s announcement is not exports but private investment, which has contracted the past three years,” he said.
Private investment was expected to contract again in the fourth quarter last year.
As the private sector holds off investment to upgrade its production, Thailand will not be able to benefit from the anticipated global economic recovery as its products will become obsolete.
CIMBT expects the Thai economy to grow 3.3% in 2016, but slow down to 3.2% this year.

Source: http://www.bangkokpost.com/business/news/1198861/analysts-expect-growth-to-match-central-bank-figures