Thailand: Economic growth accelerates more than expected in Q2
August 20, 2012
Strong growth in consumption and reconstruction activity from last year's flooding buoyed economic growth in Q2. In the second quarter, GDP expanded 4.2% over the same period last year, which marked an acceleration compared to the revised 0.4% increased tallied in the first quarter (previously reported: +0.3% year-on-year) and overshot market expectations, which had GDP growing 3.2%. The acceleration observed in the second quarter was primarily underpinned by solid growth in domestic demand. Total consumption expanded 5.4% annually in Q2 (Q1: +2.4% yoy), buttressed by healthy growth in both private and government consumption, which increased 5.3% and 5.6% respectively. In addition, gross fixed investment accelerated from a 5.2% increase in the first quarter to a 10.2% expansion in the April-June period. On the external side of the economy, exports of good and services bounced back and increased 0.9% in Q2, contrasting the 3.2% drop recorded in Q1. Meanwhile, imports picked up to 8.5% in Q2, stronger than the 4.3% expansion observed in Q1. As a result, the net contribution from the external sector to overall economic growth improved slightly from minus 4.7 percentage points in the first quarter to minus 4.4 percentage points in the three-month period to June. On a quarter-on-quarter basis, GDP grew 3.3% in the second quarter in seasonally adjusted terms, which was below the 10.8% expansion observed in the previous period.
Author: Ricardo Aceves, Senior Economist