Thailand Q1 GDP Up 4.3% On Year; Growth Forecast Revised Down

Thai economy and property heading up again? The latest quarterly report card seems to point that way... see below:-

From the RTTNews

Thailand economy grew 4.3% on year in the first quarter, same as in the prior quarter, a report from the National Economic and Social Development Board indicated Monday. While the result exceeded the 3.7% growth expected by economists, it also showed a sharp fall from the 6.1% growth posted a year ago.

Growth in Private consumption moderates

The growth in private consumption was down to 1.3% from 2.5% recorded in the prior quarter. Consumption of durable goods declined 6.2% on year, while consumption of petroleum products declined 5.7% in the first quarter.

Vehicles, electrical and electronic appliances were the worst affected as they were sensitive to income slowdown, higher interest rate and lower confidence, the report said. Private investment declined 2.1%, reversing the 2.3% growth in the previous quarter.

However, a robust external market partially offset the slow down in domestic consumption, the report said. Export value rose 18.5%, with quantity and prices rising 13.2% and 4.7% respectively. Import value increased 3.5% as quantity and prices climbed 3.4% and 0.1% respectively. The trade balance showed a surplus of US$4.13 billion, in the first quarter from US$2.24 billion for the entire year 2006.

Manufacturing sector down

The report said that the overall production expanded slower, caused mainly by a sharp decline in inventories.

The agricultural sector grew 4.3% on the strength of sugar cane and cassava production, while rice and maize production declined.

Production in the manufacturing sector slipped 4.3% led by industries of textile, petroleum products, automotives and accessories, electrical goods and jewelry.

Lower confidence among companies impacted a slowdown in activity, particularly in investment and services sector such as construction, hotel and restaurant, wholesale and retail trade and financial services, the report said.

Lower unemployment, inflation

On the positive side, the headline inflation averaged at 2.4% in the first quarter. Unemployment rate narrowed to 1.5%. Current account balance recorded a surplus of US$5.4 billion. Government expenditure increased in both current and investment spending by 11.2% and 2.1% respectively at the constant price.

Growth forecast revised down

The NESDB trimmed the growth forecast for 2007 to 4.0%-4.5% from 4.0%-5.0% estimated earlier on March 6.

“ Based on key assumptions, assessment of latest economic indicators in the first four months of this year, including positive and risk factors, NESDB considered that it is less likely for the economy to grow within the range of 4.5- 5.0% since the recovery of private consumption and investment has not yet fully realized.”

NESDB expected that the economic stability would be sustained with a low jobless rate and a falling inflation, aided by a solid current account surplus of around 3.0- to 4.0% of GDP.