NESDB and FPO expect output growth to continue

Thai GDP growth in the second quarter is not expected to slow down from the first quarter’s 3.3% after momentum continued into April, says a senior Finance Ministry official.

Improving exports and private consumption, and still-robust growth of foreign tourist arrivals to Thailand propelled the Thai economy forward last month, said Krisada Chinavicharana, director-general of the Fiscal Policy Office (FPO).

He said the strong growth in private consumption in April can be attributed to higher farm income.

New motorcycle registrations, a proxy for private consumption, surged by 16.3% yearon-year in April due largely to a 30.6% yearon-year increase in real farmer income.

Farmers in the South earned the highest income.

During the January-to-April period, the income of farmers in the South jumped by 48.8% over the same period last year, driving a 19.8% year-on-year increase in motorcycle sales in the region.

Thailand’s economy in the first quarter unexpectedly expanded at the fastest pace in three quarters, driven by recovering exports, an improving farm sector and rising private consumption. The National Economic and Social Development Board (NESDB) reported the country’s GDP grew by 3.3% year-on-year for the January-March period, accelerating from 3% in the previous quarter.

The government’s think tank has narrowed its 2017 growth outlook to 3.3-3.8% from the 3.0-4.0% range forecast in February.

The NESDB’s new average growth forecast is 3.55%, slightly below the FPO’s projection at 3.6% but above the Bank of Thailand’s estimate at 3.4%.

Mr Krisada said that number of foreign tourists visiting Thailand last month rose by 7% over the same period a year earlier and those from Hong Kong, Russia, Malaysia and South Korea comprised the bulk of nationalities coming in.

Thai exports expanded by 8.5% year-on-year in April to US$16.9 billion (577 billion baht), marking a second straight month of growth after a 9.2% jump in March.

For the first four months of 2017, Thailand’s exports rose 5.7% to $73.3 billion, the highest rate in the past six years. Imports rose accordingly by 14.5% to $69.2 billion, yielding a trade surplus of $4.11 billion for the period.

The Commerce Ministry aims for export growth of 5% this year after a rise of 0.5% in 2016.