Q4 growth at 18.9%
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The Thai economy expanded at 18.9 per cent in the last quarter of last year, pushing the 2012 growth rate to 6.4 per cent, according to data from the National Economic and Social Development Board (NESDB).
In the fourth quarter of last year, the economy showed the strong recovery thanks to the flood-induced slump in the same period of 2011. Earlier, NESDB forecast the 5.5 per cent growth rate for 2012.
The expansion is well higher than economists' expectation. Bloomberg's economist survey showed the Thai economy expanded 15 per cent in the fourth quarter, to push the annualised growth rate to 5.5 per cent.
The think tank expected the economy to further expand 4.5-5.5 per cent this year.
The supply-side GDP breakdown shows that several domestically-driven industries were still booming as of the fourth quarter, with construction, wholesale and retail trade and financial intermediation all reporting faster sequential activity. Notably construction was up a very robust 13.6 per cent, while financial intermediation was up 10 per cent. Manufacturing surged 38.5 per cent, while hotels and restaurants - reflecting tourism-related activity - saw a 25.4 per cent gain in output. The only sequential contraction that occurred was in agriculture, where output declined 2.8 per cent. Agriculture had contracted the prior two quarters as well.
"Today's stronger-than-expected GDP print stemmed from better-than-expected gains in private consumption and net exports, two key drivers of the economy," said HSBC Asean economist Su Sian Lim. "Although there were sequential contractions in investment and government consumption, we continue to remain upbeat on the prospects for overall domestic demand in the coming quarters. The declines were likely temporary after three straight quarters of red-hot gains, and going forward both public and private sector spending should continue to be supported by strong household demand, lower corporate tax rates, a low interest rate environment, and plans to significantly expand the country's infrastructure. Today's GDP print should also stamp out any market fears that Bank of Thailand might bow to government pressure and deliver a surprise interest rate cut at this Wednesday's policy meeting."
