The latest GDP estimated by the Office of the National Economic and Social Development Board (NESDB) was lower than expected.Thailand's 3Q11 GDP grew by merely 3.5 percent YoY, compared to 4.6-percent forecast of KResearch and 4.5 percent of Consensus Forecast. As a result, KResearch have revised downward our full-year projection to 1.5 percent GDP growth YoY, from our earlier estimate of 1.7 percent as of October 26, 2011. Meanwhile, the projected growth rate in our 4Q11 base case remains unchanged at a contraction of (-)3.3 percent, due to flood-hit manufacturing and other economic activity. According to KResearch, the net loss to the Thai GDP could reach THB242.2 billion.
However, KResearch projects that Thailand's economy in 2012 will gradually recover in 1Q12 before seeing economic expansion in 2Q12. Key drivers include public and private investments to be spent on post-flood recovery, as well as infrastructure development to prevent future flooding and improve water management. KResearch estimates investments related to floodwater management and rehabilitation could reach THB400-550 billion in 2012. Moreover, stimulus packages from the government and the implementation of the 2012 fiscal budget may help boost consumption. These domestic factors could boost the economy amid risks from the global economy and debt crises in the Eurozone.
KResearch predicts that Thailand's economy will expand at 4.3 percent in 2012, or be in a range of 3.5-4.8 percent. Nevertheless, although the forecast has taken into account the global economic risks, the debt crisis in the EU needs to be closely monitored. Should that problem spill over into the global financial system, it could lead to another round of global economic crisis.
Thai Economic Growth Estimates, 2011-2012
|
Units:% YoY
(or otherwise indicated)
|
2010
|
2011
|
2011 Former Forecast
|
2012
|
|
Revised Forecast
|
As of Oct. 26
|
Before flood
|
Base Case
|
Range
|
|
GDP Growth
|
7.8
|
1.5
|
1.7
|
3.8
|
4.3
|
3.5-4.8
|
|
Crude Oil, Dubai (USD/bbl.)
|
78.1
|
105.8
|
105.5
|
107.0
|
102.0
|
95-110
|
|
Private Consumption
|
4.8
|
2.5
|
2.7
|
3.6
|
2.8
|
2.4-3.3
|
|
Investment
|
9.4
|
4.6
|
4.9
|
6.3
|
5.5
|
4.5-6.0
|
|
Budget Deficit (%GDP)
|
-2.9
|
-3.2
|
-3.2
|
-3.7
|
-4.8
|
-5.8 to 3.7
|
|
Exports
|
28.5
|
16.7
|
16.7
|
20.0
|
5.0
|
2.0-8.0
|
|
Imports
|
36.7
|
23.6
|
23.6
|
24.0
|
5.0
|
2.0-10.0
|
|
Trade Balance (USD Bn.)
|
32.2
|
26.5
|
26.5
|
9.7
|
27.8
|
23.8-28.8
|
|
Current Account (USD Bn.)
|
13.7
|
10.1
|
10.1
|
12.9
|
12.8
|
8.8-13.8
|
|
Headline Inflation
|
3.3
|
3.9
|
3.9
|
3.8
|
3.9
|
3.5-4.5
|
Sources: BOT, NESDB and Ministry of Commerce, Estimated by KResearch, as of Nov. 21, 2011
Note: Trade balance in the latest forecast was revised based on new information shown in the BOT database.
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