Thai GDP Growth Decelerates In Q4

Thailand’s economic growth slowed more than expected in the fourth quarter as increases in household spending and investment were partially offset by declines in government spending and exports, official data showed on Friday.

Gross domestic product grew only 1.4 percent on a yearly basis in the fourth quarter, moderating from the 4.6 percent expansion in the third quarter, the National Economic and Social Development Council said. GDP was forecast to gain 3.5 percent.

Quarter-on-quarter, GDP dropped 1.5 percent, in contrast to the 1.1 percent expansion in the preceding period and also confounding economists’ forecast of +0.5 percent.

In terms of production, agriculture production expanded 3.6 annually. The annual increase was from sugarcane, oil palm, maize and vegetables and fruits.

On the other hand, industrial production declined 4.6 percent, reversing a 4.5 percent increase in the prior period, due to the fall in manufacturing. Meanwhile, the service sector grew 4.2 percent, which was slower than the 5.5 percent rise in the prior quarter.

On the expenditure-side, household spending grew 5.7 percent driven by higher consumption of food and semi-durable goods, while spending on vehicles declined from the last year.

By contrast, government spending slid 8.0 percent following 0.5 percent decrease a quarter ago. At the same time, gross fixed capital formation grew 3.9 percent, decelerating from a 5.5 percent rise.

Exports and imports decreased 0.7 percent and 4.6 percent, respectively in the fourth quarter.

In the whole year of 2022, GDP growth accelerated to 2.6 percent from 1.5 percent in 2021, driven mainly by the tourism recovery and continual improvement of domestic demand in both private consumption and investment.

The government forecast the economy to expand in the range of 2.7 – 3.7 percent this year, underpinned by the recovery in tourism, growth in investment and the continual expansion of private consumption. Nonetheless, the outlook was revised down from 3-4.0 percent estimated previously.

Capital Economics’ economist Gareth Leather said the economy is likely to benefit from a rebound in regional travel this year, driven by China’s reopening. Thailand is set to be one of the few economies in the region to grow faster this year than last year, the economist observed.

Last month, the Bank of Thailand raised its benchmark rate by a quarter point to 1.50 percent to bring down inflation to the target range. Inflation eased to a nine-month low of 5.02 percent in January.

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