Thailand: GDP marks the slowest expansion in six quarters
November 18, 2013
In the third quarter, GDP expanded 2.7% over the same period last year, which was slightly down from the revised 2.9% increase recorded in the second quarter (previously reported: +2.8% year-on-year) and undershot market expectations of a 3.0% rise. In addition, the figure marked the slowest expansion since Q1 2012.
The quarterly reading mainly reflected a deterioration in domestic demand. Private consumption fell 1.2% over the same period last year (Q2: +2.5% yoy), while government consumption decelerated from a 7.6% expansion in Q2 to 7.4% increase in Q3. In addition, fixed investment fell 6.5%, contrasting the 4.7% increase recorded in the previous quarter.
On the external side of the economy, exports of goods and services expanded 3.8% in Q3, up from the 2.9% increase recorded in Q2. Meanwhile, imports rose 0.7%, which marked a significant deterioration over the 4.5% expansion observed in Q2. As a result, the external sector's net contribution to overall economic growth rose from minus 0.7 percentage points in the second quarter to plus 2.5 percentage points in the third quarter.
On a quarter-on-quarter basis, GDP expanded 1.3% in seasonally-adjusted terms in Q3, which was up from the revised flat reading recorded in the second quarter (previously reported: -0.3% quarter-on-quarter). The Thai Central Bank forecasts GDP to expand 3.7% in 2013 and 4.8% in 2014. FocusEconomics Consensus Forecasts panelists expect the economy to expand 4.8% in 2013, which is up 0.1 percentage points from last month's estimate. For 2014, the panel predicts that economic growth will reach 5.0%, which is unchanged from last month's estimate.
Author: Dirina Mançellari, Senior Economist