Solid start as key measures gain strength

The Thai economy got off to a solid start in 2017, with tourism, exports, private investment, private consumption and inflation gaining momentum, says the Fiscal Policy Office (FPO).

Growth in private consumption in January was reflected by a 2.3% year-in-year rise in value-added tax collection after December’s 2.2% contraction, said director-general Krisada Chinavicharana.

He said the uptick in private consumption could be due to a 16.8% gain in farmer income stemming from improving crop prices. The growth was in line with an increase in the consumer confidence index to 63.1 last month from 62.5 in December.

Private investment recovered, as witnessed by the fact that sales of commercial pickup trucks swung to 4.5% growth in January after a 13.9% decline in December.

Cement sales and taxes related to property transactions, both barometers of private investment, also improved. Cement sales rose by 4.5% year-on-year in January, besting December’s 0.3% growth, while taxes related to property transactions fell by 6% after a 27.6% contraction a month earlier.

The number of foreign tourist arrivals in Thailand jumped by 6.5% year-on-year in January to 3.2 million, up from a 1.1% increase in December, Mr Krisada said, adding that foreign visitors contributed 169 billion baht to the economy last month.

Exports soared by 8.8% year-on-year in January to US$17.1 billion, improving on growth of 6.2% in December. January imports rose by 5.2% year-on-year after a 10.3% increase in the previous month.

The FPO in January revised up its 2017 GDP growth forecast to 3.6% from a previous prediction of 3.4% — above the Bank of Thailand’s 3.2% view but within the National Economic and Social Development Board’s range of 3-4%.

The Finance Ministry has said GDP growth can reach its potential of 4% this year if private investment is ramped up.

Economic growth slowed to a one-year low in the fourth quarter of 2016, bringing the full-year reading to 3.2% after a 2.9% showing in 2015.

Mr Krisada said the overall economy remains sound, with headline and core inflation rates of 1.6% and 0.7% in January.

In December, headline inflation was 1.1%, while core inflation — which strips out food and energy prices — was 0.7%.

The unemployed in December numbered 450,000, representing 1.2% of the country’s workforce.

The ratio of public debt to GDP stood at 42.2% at the end of January, well below the Finance Ministry’s 60% threshold. Foreign reserves amounted to $179 billion, 3.2 times the size of Thailand’s short-term debt.