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Fourth-quarter Thai GDP growth lost the momentum of Q3

Feb 17. 2020
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By The Nation

Thailand’s gross domestic product in the fourth quarter of 2019 expanded by 1.6 per cent year on year, decelerating from 2.6 per cent in Q3 2019, as a consequence of decrease in exports, government final consumption expenditure and public investment. However private final consumption expenditure and private investment maintained their growth momentum, the Nation Economic and Social Development Council reported today (February 17)

On the production side, the agricultural sector decreased by 1.6 per cent, compared to a rise of 2.7 per cent in Q3 2019. Non-agricultural sector increased by 2 per cent, slowing down from 2.5 per cent in Q3 2019, due to the manufacturing sector declining by 2.3 per cent.

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Manufacturing was hurt mainly by a drop in output of motor vehicles and refined petroleum products. Nevertheless, the services sector increased by 4.1 per cent, compared to an expansion of 3.9 per cent in the previous quarter. The improvement was driven by expansion in accommodation and food service activities, wholesale and retail trade; repair of motor vehicles and motorcycles, and information and communication with growth rates of 6.8 per cent, 5.2 per cent, and 10.8 per cent, respectively.

On the expenditure side, private final consumption expenditure, and gross fixed capital formation grew by 4.1 per cent, and 0.9 per cent, compared to 4.3 per cent, and 2.7 per cent in Q3 2019, respectively. 

Government final consumption expenditure, exports and imports of goods and services decreased by 0.9 per cent, 3.6 per cent, and 8.3 per cent, respectively. After seasonal adjustment, the Thai economy in Q4 2019 expanded by 0.2 per cent.

Private final consumption expenditure increased by 4.1 per cent, in comparison with a rise of 4.3 per cent in Q3 2019, contributed largely by an expansion of semi-durable and service items with a rise of 2.7 per cent and 8.5 per cent, accelerating from 2.4 per cent and 6.4 per cent respectively in Q3 2019. However, non-durable items grew by 2.6 per cent, slowing from 3.5 per cent in Q3 2019 whereas durable items declined by 4.1 per cent, in contrast to a rise of 1.6 per cent in Q3 2019.

General government final consumption expenditure decreased by 0.9 per cent, compared to a 1.7 per cent growth in Q3 2019. The contraction was mainly contributed by a 6.5 per cent decline in purchases of goods and services while compensation of employees increased by 1.4 per cent, slowing from 1.8 per cent in Q3 2019. 

Meanwhile, social transfer in kind grew by 5.1 per cent.

Gross fixed capital formation grew by 0.9 per cent, slowing from 2.7 per cent in the third quarter of 2019, contributing largely to private investment with an increase of 2.6 per cent, compared to 2.3 per cent in Q3. The expansion was due mainly to a 3.1 per cent and 2.5 per cent investments in construction and machinery items, respectively. However, public investment dropped by 5.1 per cent, compared to a 3.7 per cent growth in Q3 2019, which contributed to a decrease in construction and machinery items. In particular, a contraction in government construction resulted from a delay in passing the FY2020 budget bill.

Changes in inventories at current market prices in this quarter increased with a value of Bt126.3 billion. Accumulation in stocks was mainly from paddy, gold, and wearing apparel.

Goods and services balance at current market prices recorded a surplus of Bt390.9 billion comprising surpluses of Bt180.1 billion in trade balance and Bt210.8 billion in service balance.

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