CLASSIFIEDS ONLY THB 2,500 + VAT FOR 3 LANGUAGES The Phuket News Kata Rocks The Phuket News
The Phuket News Business News
The Phuket News Phuket | Thailand | World | Business | Q&A | Weird World XML, RSS, Feed
The Phuket News The Phuket News
The Phuket News

Exports demand push GDP growth, but household debt a concern: reports Oxford Business Group

The Oxford Business Group notes in its annual country report for Thailand that over the course of the past year, rising overseas demand for goods and services pushed Thailand’s GDP towards five-year highs in 2017, with business-friendly fiscal policies and planned spending on infrastructure expected to support further expansion in 2018.

economics,

Saturday 20 January 2018, 09:26AM


Exports demand push GDP growth, but household debt a concern: reports Oxford Business Group

However, the Group also noted in its annual report that household debt is a cause for concern for the country.

The Thai economy improved over the course of 2017, recording year-on-year (y-o-y) growth of 3.3% in the first quarter, 3.8% in the second quarter and 4.3% between July and September, the largest quarterly jump since 2013, according to the National Economic and Social Development Board (NESDB).

The board cited a rise in exports, consumption and private investment, coupled with improved returns from agriculture and manufacturing, as key contributors to growth.

The positive results prompted the NESDB to narrow its forecast for full-year growth to 3.9%, at the upper end of the 3.5-4% predicted by the NESDB, and slightly above the 3.8% projected by the Bank of Thailand (BOT) and the IMF. The board had earlier given a broader forecast for GDP expansion of between 3.6% and 4.6%.

Strong performance from exports

Significantly higher levels of international sales underpinned growth as 2017 went on, with the value of exports in US dollar terms rising by 6.8% y-o-y in the first quarter, before expanding by 7.9% and 12.5% in the second and third quarter, respectively.

Of this, agricultural exports jumped by 20.5% between January and March, 19.2% in the second quarter and 28.4% during the July-September period – with the latter period seeing the highest growth recorded in two years.

Manufacturing products also performed well, expanding by 5.9%, 12.5% and 9.6%, respectively, on the back of more favourable global economic conditions.

Full-year export growth is slated to reach 8.6% in 2017, following 0.1% growth in 2016 and three consecutive years of negative growth before that.

Interest rates and inflation remain steady

Despite the faster pace of growth, the BOT left its benchmark one-day repurchase rate at 1.5% throughout 2017. The rate has been on hold at 25 basis points above its all-time low since April 2015.

In notes released following a review in late November, the bank’s monetary policy committee appeared to rule out any short-term increases, as well as any further reductions in the rate.

“Recent below-target inflation was mainly due to supply-side and structural factors; further monetary policy accommodation therefore would not be appropriate and could result in the build-up of vulnerability in the financial system,” it concluded.

The bank is expected to maintain its accommodative benchmark rate well into 2018 on the back of muted inflation, given the prospect of interest rate hikes from the US Federal Reserve, according to Chavinda Hanratanakool, CEO of Krungthai Asset Management.

“The cost of business will surge if interest rates go up,” she told OBG. “Even with the gap closing for 1.5%, the policy rate may remain the same.”

World Cup League @ BISP

Indeed, inflation also closed out 2017 below the BOT’s targeted range of 1-4%. The consumer price index rose 0.7% on average over the year, below the BOT’s band.

Major infrastructure plans to help drive new growth

The government’s Thailand 4.0 programme, which aims to shift the economic focus away from production and towards services, is set to be a major driver of new growth in 2018.

Increased spending on supporting infrastructure, research and development, technology and value-added manufacturing, combined with incentives that include tax holidays and exemptions on import duties for many industrial inputs, are likely to spur private sector investment.

Thailand 4.0 is also expected to improve the country’s regional competitiveness, with the aim of halting enterprise relocation to more labour-intensive manufacturing bases such as Vietnam and Cambodia.

Competitiveness will be boosted through an acceleration of transport projects in 2018, with ground to be broken on three rapid transit lines in the capital. In addition, the government has budgeted B745 billion (US$22.8bn) for more than 100 transport projects in Thailand’s Eastern Economic Corridor (EEC), according to Arkhom Termpittayapaisith, the minister of transport.

“The idea is to develop the infrastructure for air and sea, and make the travelling time between the capital and the EEC shorter by building the Bangkok-Rayong high-speed rail,” he told OBG.

Household debt a cause for concern

Domestic consumption is expected to rise into 2018, following the implementation of tax breaks on year-end shopping after the year-long period of mourning for the late King Bhumibol Adulyadej ended on Oct 27.

According to the NESDB, private consumption expanded by 3.1% in the third quarter, up from 3% and 3.2% in the preceding two quarters.

Any further increases in consumer spending, then, should have a positive impact across several sectors, including manufacturing, retail and tourism.

However, high levels of household debt could moderate expenditure. The ratio of household debt to GDP stood at around 77% in mid-November, according to BOT data, down slightly from a high of 80% in 2015, but still weighing on purchasing power, according to the bank.

Spending could also be affected by higher fuel inflation in 2018 if oil prices move upward.

– Rey Davis-Tuplano, Editorial Manager, Oxford Business Group


This information was originally published by Oxford Business Group (OBG), the global publishing, research and consultancy firm. Copyright Oxford Business Group 2018. For economic news about Thailand and other countries covered by OBG, please visit http://www.oxfordbusinessgroup.com/economic-news-updates.

 

 

The Phuket News
The Phuket News
Comment on this story
* Please login to comment. If you do not have an account please register below by simply entering a username, password and email address. You can still leave your comment below at the same time.
Comments Here:

Comments Left: Characters
Username:
Password:
E-mail: (No Hotmail, Live, MSN and Outlook accepted at this time)
Security:
   => Forget password?

Be the first to comment.

The Phuket News
The Phuket News The Phuket News The Phuket News
The Phuket News
Share this
The Phuket News
Have a news tip-off? Click here
The Phuket News
Related stories
The Phuket News
Phuket community

Recent Comments


International Surf Lifesaving Association issues Phuket travel warning

Let's hope everyone's volunteer visa and work permits are in order. Ruffling a few feathers...(Read More)


Phuket condo market climbs after big hit

Anyone who can spin this data as a positive outlook is either in the property business or has no understanding of the property business, or maybe both...(Read More)


Phuket’s Emerald Group CEO on bail again, after missing court date

Absolute rubbish from the clowns who don't even bother to research the subject, nor have a clue about Court processes and the reasons for the same...(Read More)


Cops raid shady electronic waste plant

If you read the article the owner was Taiwanese, with overseas investors, not Thai....(Read More)


Phuket fugitive wanted for family shooting arrested in Satun

How many illegal firearms do the police think there is around Thailand ? What do police do to cut this number down ? I had a problem for some years ...(Read More)


International Surf Lifesaving Association issues Phuket travel warning

Mr. Jenner should be extra cautious after offending those who profit from ocean activities. Might wear a kevlar jacket as well as a life jacket on hi...(Read More)


Phuket monkey ‘birth control’ to go to public opinion

"They should be culled. They are a nuisance and a danger to the public". A bit harsh. I realise that Thai officials can be infuriatingly ...(Read More)


International Surf Lifesaving Association issues Phuket travel warning

"There is no one on standby to save you from crossing the road unsafely," seems like our small group of thai apolgists has another aka. The ...(Read More)


Senior monks defrocked after raids

Rotten to the core. Unfortunately it goes deeper than that. My girlfriend told her ageing mother is reaching the end of her life. But for a fee, they ...(Read More)


Phuket monkey ‘birth control’ to go to public opinion

They should be culled. They are a nuisance and a danger to the public....(Read More)

The Phuket News
PHUKET NEWS
Phuket
Thailand
World
Business
Q A
Weird World
ARCHIVE
POLL
CURRENCY
WEATHER
PHUKET TIDE TABLE
The Phuket News PHUKET LIFE
Phuket Arts
Phuket Community
Phuket Culture
Phuket Dining
Phuket Education
Phuket Entertainment
Phuket Environment
Phuket Health
Phuket People
Phuket Technology
Phuket Travel
World Entertainment
Photo Galleries
The Phuket News PHUKET SPORT
Phuket
Thailand
World
SURF REPORT
PREDICTIONS
The Phuket News PHUKET CLASSIFIEDS
Phuket Buy and Sell
Phuket Jobs
Phuket Property
Phuket Cars and Boats
Phuket Community
Phuket Services
SEARCH CLASSIFIEDS
POST CLASSIFIED
The Phuket News The Phuket News PHUKET EVENTS
Phuket Event listings
Phuket Event calendar
Buy Tickets
POST EVENT
The Phuket News PHUKET DIRECTORY
Phuket Bars, pubs and clubs
Phuket Hotels and villas
Phuket Restaurants
Phuket Yellow Pages
POST LISTING
The Phuket News BARGAINS
The Phuket News ABOUT US
The Company
Distribution points
Subscribe
Advertise with us
Pay for advert
Contact us
CONTESTS
Content Google Map
Site map
Australian Visa Services
 
Currency - The Phuket News   Weather Report - The Phuket News   Surf Report - The Phuket News
LinkedIn - The Phuket News   Twitter - The Phuket News   YouTube - The Phuket News   Facebook - The Phuket News
Copyright © 2018 Class Act Media. All rights reserved. | Website usage terms and conditions | Privacy and Confidentiality Statement.