Thailand springs GDP surprise for Q1: Large and positive

BANGKOK - The breadth of the acceleration in growth was the most notable feature of Thailand’s Q1 GDP data. Apart from exports, which slightly moderated to 6% y/y from 7.4% y/y previously, all other components accelerated during the quarter.

Private consumption strengthened to 3.6% y/y from 3.4% y/y previously, while investment recorded growth of 3.4% y/y, compared with a meagre 0.9% for full year 2017

AND Bank reported that the improvement in investment stretched beyond the public infrastructure investment programme.

“Growth in private investment strengthened to 3.1% y/y in

Q1 from 2.4% y/y in Q4 2017, validating the Bank of Thailand’s (BoT) view that Government spending is starting to crowd in the private sector as well,” ANZ said.

“Public investment increased 4% y/y after declining 6% y/y in the previous quarter. We also believe that improving capacity utilisation is supporting investment in the manufacturing sector.”

ANZ noted that net exports were a drag on growth during the quarter, subtracting 1.1% from overall growth, but underlying this was a slowdown in exports and a strengthening of imports alongside domestic demand.

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“From the supply side, agricultural output (including fishing) expanded 6.5% y/y, reversing a contraction of 1.3% y/y in the previous quarter. This turnaround presumably resulted in higher incomes and consumption in the rural sector.

“Growth in non-agriculture GDP remained unchanged at 4.7% y/y.” www.live.anz.com (ATI).