1H18 Economy Recorded Surprising Growth, Aided by Domestic Spending … 2018 GDP Projected to Expand at Least 4.5% (Business Brief No.3756)

          The Thai economy grew at an average of 4.8 percent p.a. during 1H18, supported by steady GDP growth of 4.6 percent p.a. in 2Q18. Domestic spending began to support the Thai economy in addition to exports and tourism amid rising agricultural supplies.

          Looking into 2H18, the Thai economy may continue to grow from that reported in 1H18, aided further by the government measures, including accelerated disbursements of 2018 mid-year budget and spending on various public investment projects despite global economic uncertainties, such as unresolved trade disputes between the US and China, plus the Turkish financial crisis. We at KResearch have assessed that the US-China trade conflicts and Turkey's economic meltdown may be prolonged into 2019, thus threatening Thailand via the volatility in capital movements and FX, though such impacts on the Thai economic performance will likely be limited.

            Close attention, however, must be paid to flooding in Thailand because it may undermine the 4Q18 GDP growth. Our 3-month Expected KR-ECI for July shows that some Thai households in the farming and trade sectors, especially those residing in the northern, northeastern and eastern regions, are worried that weather conditions and inundation during the rainy season may adversely affect their income. Many households said that they may use savings to repairs their homes if they are damaged by flooding. Preliminarily, KResearch expects that the 2018 Thai economic growth may lean toward the upper band of our projection at 4.5 percent or within 4.0-5.0 percent.