Thai Q3 GDP up 1.3pc
Bangkok, November 23, 2009
A rebound in manufacturing and exports pushed Thailand's economy up 1.3 per cent in the July-September quarter from the previous quarter, extending Thailand's recovery from its first recession in 11 years.
The second straight quarter of expansion in Southeast Asia's second-biggest economy was slightly weaker than most economists had expected, but from a year earlier the data looked surprisingly strong, causing economists to hold off from altering forecasts for a rate rise in the second half of next year.
The central bank has left interest rates unchanged at its past four policy meetings and is expected to hold them again on December 2. The central bank cut rates by a combined 250 basis points from December to April.
"The central bank should still keep the interest rate where it is until the second half of 2010, with political factors being one of the major risks to the country's economic growth," said Pimonwan Mahujchariyawong, an economist at the Kasikorn Research Center in Bangkok.
Many private forecasters factor political instability into their outlook for Thailand, with no end in sight to a seemingly intractable political crisis, underscored by plans for prolonged anti-government protests starting on November 28.
Gross domestic product grew 1.3 per cent in the third quarter from the previous three months, the state planning agency said on Monday, against the 2.3 per cent forecast by economists and revised 2.2 per cent growth in the second quarter.
It contracted 2.8 per cent in the quarter from a year before, beating forecasts of a 3.3 per cent decline.
Manufacturing grew 2.6 per cent in the quarter from the previous quarter as exporters at the heart of the $261 billon economy such as integrated circuit packager Hana Microelectronics reported rising demand for orders.
Exports for goods and services rose 5.2 per cent from the previous quarter, while imports gained two per cent and household spending rose a meager one per cent, the data showed.
Recovery 'gradually taking shape'
"The economic recovery in Thailand is gradually taking shape, given the fiscal stimulus and easier monetary policy," economist Usara Wilaipich at Standard Chartered Bank said.
"Looking forward, the outlook remains uncertain, given concerns about the ongoing political instability," she said.
The National Economic and Social Development Board (NESDB) said it expected the economy to return to annual growth of 2.7 to 3.2 per cent in the fourth quarter.
"The economy in the fourth quarter should be positive, boosted by improved exports, tourism, consumption and government spending," it said in a statement.
The agency forecast the economy would grow 3.0 to 4.0 per cent in 2010 after a projected 3.0 per cent contraction this year. The Bank of Thailand (BOT) has forecast a contraction in the economy of between 2.5 per cent and 3.5 per cent in 2009.
The baht gained slightly after the data, trading at 33.18/24 per dollar compared with around 33.22 just before. Thai stocks opened down 0.23 per cent.
Thailand slipped into recession in the first quarter when its GDP contracted a revised 1.5 per cent after a collapse in exports, following a 4.8 per cent fall in the fourth quarter of 2008. The recession was the first since the 1998 Asian economic crisis.
Analysts also expected that the economy would revert to annual growth in the fourth quarter after four quarterly contractions, expecting a recovery in exports to pick up pace and government stimulus measures to boost consumption.
Customs data on Friday showed exports fell by just 3 per cent in October from a year before, the smallest drop in a year.
Imports remained weak, however, and since many imports are used in exported products, economists said that raised concern about future growth. – Reuters