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Thai GDP slows but govt maintains 2018 outlook on solid exports

Thai GDP slows but govt maintains 2018 outlook on solid exports

BANGKOK: Thailand’s economy posted its strongest growth in five years last year, with solid exports and tourism giving the government confidence to maintain the country’s growth outlook for 2018.
While the economy grew slightly less than expected in the fourth quarter as state spending slowed, resilient exports prompted the government on Monday to raise its outlook for exports, which have been the economy’s main engine of growth.
Exporters, however, face tougher challenges ahead from rising U.S. trade protectionism and a strong baht, hovering at four-year highs. It was down 0.1 percent after the data.
The economy grew a seasonally adjusted 0.5 percent in October-December from the previous three months, National Economic and Social Development Board (NESDB) data showed, slower than 0.7 percent forecast in a Reuters poll and 1.0 percent growth in the previous quarter. On an annual basis, growth was 4.0 percent, lower than a median forecast of 4.4 percent, and the July-September quarter’s 4.3 percent expansion, which was the fastest annual pace since January-March 2013.
The NESDB maintained its 2018 economic growth forecast at 3.6-4.6 percent, after the economy grew 3.9 percent in 2017.
Tim Leelahaphan, economist at Standard Chartered, said he was sticking to his above consensus outlook of 4.3 percent growth for 2018.
Global economic growth and higher commodity prices, robust import growth – which markets overlook  suggests a strong foundation for export growth in 2018.”
The government raised its 2018 export growth outlook to 6.8 percent from 5 percent. Thailand’s exports, worth about two-thirds of the economy, jumped nearly 10 percent in 2017 after years of underperforming its Asian peers.
Southeast Asia’s second-largest economy has posted better headline growth in the last few years underpinned by a solid global economic recovery, but it is still far from firing on all cylinders.
Growth remains heavily reliant on exports, and the boost from trade has been slow to percolate into the broader economy. Private investment and consumption continue to lag, restrained by high household debt, and excess industrial capacity remains an issue.
Hoping for more ballast from the domestic economy, Thailand’s government has said growth will be driven by fiscal spending and big infrastructure projects.
Annual exports in the December quarter jumped 11.6 percent, private consumption rose 3.5 percent, and private investment edged up 2.4 percent. Public investment contracted 6 percent, NESDB data showed.