In June, the Thai economy featured mixed indications amid negative export and manufacturing data with contractions of (-)4.7 and (-)8.0 percent MoM, respectively, due largely to the Eurozone debt crisis. Meanwhile, private consumption was sluggish, contracting (-)2.5 percent MoM, while investment rose only 0.02 percent MoM, after they were boosted by the post-flood recovery efforts.
Although exports and manufacturing during April-June were unable to maintain growth momentum, KResearch views that the satisfactory spending throughout 2Q12 should likely help our economic growth to reach 2.6 percent YoY – rising by 0.3 percent over 1Q12 – thanks to decelerating inflation pressure and the government's additional measures to increase incomes and spending.
Regarding the outlook for 2H12, KResearch views that the Thai economic growth will be seen due to the low base effect of last year, thus supporting export and manufacturing growth figures. Meanwhile, domestic spending of both private and government sectors will be vital to boosting our economy amid international volatility.
Therefore, we have reduced our forecast for 2012 Thai economy performance to 4.5-5.5 percent growth, against our previous forecast of 4.5-6.0 percent due to negative influences globally, i.e., the Eurozone crisis, as well as slowing Chinese and US economic performance that is threatening our export sales.
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