Investment in Thailand

Thailand - Investment
Despite slowdown in the final quarter, the economy grew at fastest clip in 2017 in five years
The momentum in the Thai economy slowed somewhat in the final quarter of 2017. GDP expanded a solid 4.0% annually, slightly below the prior quarter’s reading of 4.3% year-on-year and below market expectations of 4.4% growth. The result was chiefly supported by robust manufacturing activity and a buoyant external sector. The fourth quarter rounded off a strong year for the economy, which registered a full-year growth rate of 3.9%, the quickest pace of expansion since 2012. Growth in 2017 was primarily supported by the non-agricultural sector.
Household expenditure grew 3.5% year-on-year in the fourth quarter, coming in a notch higher than the third quarter’s 3.4% annual growth rate. This points to a recovery in private consumption through the second half of 2017, following a slowdown in the first half of the year. Private consumption benefited from low inflation levels and growth in incomes throughout the quarter. Both government consumption and fixed investment growth, however, slowed markedly in the final three months of the year. Government consumption grew a meager 0.2%, coming in notably below the previous quarter’s 1.8% annual growth rate. Fixed capital formation growth also decreased significantly, from 1.2% year-on-year in Q3 to 0.3% year-on-year in Q4. The third consecutive quarterly drop in public fixed investment drove the significant slowdown.
Growth of both exports and imports accelerated year-on-year in the final quarter from the prior one, and the trade balance surplus widened. Exports of goods and services increased a strong 7.4% in annual terms (Q3: +6.9% year-on-year), owing to robust foreign demand for agricultural and manufacturing products, as well as an energetic tourism sector. Imports of goods and services expanded 7.5% on an annual basis over the previous quarter’s 6.5% annual growth rate. Solid demand for consumer goods and raw materials, which was in part thanks to demand from export-orientated industries, supported the steady growth.
Looking ahead, the Thai economy is expected to maintain a healthy trajectory this year and next. Growth this year is expected to come on the back of a robust external sector and solid domestic demand, as government expenditure is likely to pick up ahead of the elections scheduled for November. Growth in the external sector is, however, seen moderating this year due to a large base effect, as 2017 was a stellar year in which the external sector recovered from five meager years. However, high household indebtedness could drag on growth prospects. A strong baht and rising protectionism could cloud the external sector’s outlook.
Thailand GDP Forecast
The FocusEconomics panel forecasts that the economy will grow 3.8% in 2018, which is unchanged from last month’s estimate. For 2019, the panel projects the economy will expand 3.7%.
Thailand - Investment Data
2012 | 2013 | 2014 | 2015 | 2016 | |
---|---|---|---|---|---|
Investment (annual variation in %) | 10.7 | -1.0 | - | - | - |
Thailand Facts
Value | Change | Date | |
---|---|---|---|
Bond Yield | 2.45 | 0.0 % | Apr 19 |
Bond Yield | 2.45 | 0.0 % | Apr 19 |
Exchange Rate | 31.19 | 0.17 % | Apr 19 |
Exchange Rate | 31.19 | 0.17 % | Apr 19 |
Stock Market | 1,795 | -1.41 % | Apr 19 |
Stock Market | 1,795 | -1.41 % | Apr 19 |
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Economic News
Thailand: Inflation jumps in March but remains below Central Bank’s target range
April 2, 2018
Consumer prices in Thailand dropped 0.09% over the previous month in March, a softer contraction compared to the 0.23% month-on-month decrease in February.
Thailand: Manufacturing output growth remains strong in February
March 30, 2018
Manufacturing output expanded 4.7% year-on-year in February, which matched the revised 4.7% annual growth recorded in the prior month (previously reported: +3.4% year-on-year) and surprised markets on the upside.
Thailand: Export growth picks up as trade balance returns to positive territory in February
March 23, 2018
In February, export growth came down from the prior month’s multi-year high, but beat expectations.
Thailand: Inflation moderates again in February
March 2, 2018
Consumer prices in Thailand dropped 0.23% over the previous month in February, contrasting a 0.07% month-on-month increase in January.
Thailand: Manufacturing output picks up steam in January
February 28, 2018
Manufacturing output expanded 3.4% in January on an annual basis, up from December’s 2.3% expansion.