Thailand Economy Outlook
Thailand Economy Outlook For 2017
The Thailand economy outlook for 2017 is set to rise despite a dip in the last quarter of 2016. An in-depth and very well researched article by Thailand Business News explains the factors behind the promising outlook for the Thai economy heading into 2017.
Some of the key points from the report are:
Despite 4Q 2016’s lowest growth rate in a year, EIC maintains its views on Thailand’s GDP growth at 3.3% YOY in 2017.
The economy should recover as temporary factors wane off. Higher growth will gradually resume after the tourism sector improves coupled with support from domestic spending.
In fact, the number of foreign tourist arrivals in January, 2017 bounced back to grow 6.5%YOY, after a 0.9%YOY contraction in 4Q2016.
As for private consumption, growth should continue thanks to higher income of exporters and farm households. Their income prospect is improving as commodity prices have been recovering since November, 2016.
Growth in the second half will be higher than the first half.
Greater household purchasing power is expected to rise after some households lift off debt burden from the first car scheme. Its effect should be more evident in the second half of the year. Also, the government is likely to inject more stimulus into the economy.
A new upside includes a mid-year budget in 2017 of 190 billion baht that was approved on January 27. The actual amount expected to reach the economy is around 140 billion baht, or around 1.3% of GDP at current price. The budget will be spent on investment on small projects in various provinces across the country. EIC expects this additional budget to be disbursed in the second half of the year. This can pose an upside risk to the current forecast.
The year 2017 is still full of external risks that can pressure exports to under perform.
Trump’s trade protectionism policy, if implemented on China, can stall Thailand’s export recovery. Thailand is part of China’s supply chain for exported products to the US as Thailand’s export of intermediate goods to China accounts for 43% of its total export to China. At the same time, China is faced with a slower economic growth and stability issues in the banking sector.
By: Yuwanee Ouinong and Pimnipa Booasang
We also covered Thailand’s Economic outlook for 2017 here Thailand Economy 2017