Thailand’s economy gains momentum and is projected to attain 3.5% in 2017, and 3.6% in 2018.
- The economy grew by 3.3% during the first quarter of 2017, exceeding market expectations. It is also gaining momentum as farm incomes recover from drought, merchandise and tourism exports rise, and the continued fiscal stimulus.
- Merchandise export grew 6.6%, the highest in the last four years, due to rising global commodity price and trading partner growth.
- The agricultural sector expanded by 7.7% due to rising agricultural prices and recovery from severe drought.
- Private consumption expanded by 3.1%, compared to 2.2% in 2015, driven by improved farm income, stimulus measures and recovering consumer confidence.
- More public infrastructure investments to connect lagging regions and upgrade rail through dual tracking can boost private investment, raise economy-wide productivity and improve investor sentiment.
- Thailand has the potential to raise growth to above 4% by addressing structural bottlenecks – education quality, services liberalization and public infrastructure management.
- Risks to recovery: Political uncertainty if reforms and elections become postponed, and a deterioration in the global environment including increased trade protectionism and a slowdown in the Chinese economy may impede Thailand’s export momentum and private investment recovery.