Thai Economy Expanded More Than Expected in Second Quarter
Thailand’s economy grew more than analysts estimated in the second quarter as the military government accelerated spending on road and rail projects to help offset weak demand for the nation’s exports.
Gross domestic product expanded 3.5 percent in the three months through June from a year earlier, the National Economic and Social Development Board said in Bangkok Monday. That compares with the 3.3 percent median estimate in a Bloomberg News survey of 22 analysts. GDP grew 0.8 percent from the previous three months, compared with a 0.5 percent median estimate.
Growth Returns
The baht gained 0.2 percent to 34.712 against the dollar as of 11:47 a.m. in Bangkok. The benchmark SET Index of stocks fell 0.1 percent after a slide in tourism-related companies including Airports of Thailand Pcl and Minor International Pcl.
The NESDB said GDP growth this year will be toward the upper end of its range of 3.0 percent to 3.5 percent, with tourism and government spending likely to be the key drivers in the second half. The economic forecasting unit raised its estimate for tourist arrivals to 33.5 million this year, from an earlier estimate of 33 million.
Government Spending
Prime Minister Prayuth Chan-Ocha has issued a series of economic stimulus measures valued at more than $18 billion since September last year to help support local demand. Fiscal spending from April through June jumped 18 percent from the same period last year to 650 billion baht ($18.7 billion), accelerating from 8.7 percent in the previous three months, according to the central bank.
The NESDB expects the government will disburse a further 110.5 billion baht of stimulus funds in the second half, after handing out 217 billion baht in the first six months. The economy is also expected to get a boost from a recovery in domestic spending, after farm incomes expanded for the first time in 10 quarters in the second quarter, according to the NESDB.
That may help offset weaker demand for Thailand’s exports, which contracted 3.1 percent in the second quarter. Tourist arrivals rose 8.2 percent from the same period last year to 7.55 million, according to the central bank.
Suttinee Yuvejwattana BLOOMBERG MARKETS August 15, 2016
Author: Patrick Lusted