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Thailand GDP Growth Weakens In Q4

Thai GDP 022017

Thailand's economic growth eased to a one-year low, as expected, in the fourth quarter of 2016, reflecting weak private consumption, figures from the National Economic and Social Development Board revealed Monday.

Gross domestic product climbed 3 percent year-on-year, slower than the 3.2 percent expansion seen in the third quarter. This was the slowest growth since the fourth quarter of 2015, when GDP gained 2.7 percent.

On a sequential basis, the economy grew 0.4 percent in the fourth quarter, the same pace as seen in the previous three months.

The expenditure side breakdown showed that the government consumption expenditure and gross fixed capital formation grew by 1.5 percent and 1.8 percent, respectively, recovering from the previous quarter.

Meanwhile, the private consumption expenditure rose 2.5 percent, which was slower than the 3 percent increase in the third quarter.

In the external sector, exports of goods and services rose as a result of improvement in exports of goods whereas services receipts slowed down.

In 2016 as a whole, GDP growth improved to 3.2 percent from 2.9 percent in 2015. The NESDB projected economic expansion of 3-4 percent for this year versus the earlier forecast of 3.2 percent growth.

A combination of lackluster external demand, high household debt and continued political uncertainty will keep growth subdued in the quarters ahead, Krystal Tan, an economist at Capital Economics, said.

The NESDB projected headline inflation rate to range between 1.2 and 2.2 percent and the current account to record a surplus of 9.4 percent to GDP.

With inflation set to remain benign, the central bank is likely to keep interest rates at their current lows for a prolonged period, the economist said.

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