January Economic Indicators: Growth Seen Amid Export Rebound (Business Brief No.3414 Full Ed.)

• Domestic spending grew steadily, though spending in several categories did not accelerated as much as in preceding months. Domestic spending was supported by a number of factors, e.g., rising investments amid rapid Baht appreciation, higher disposable incomes, car sales via the first-time car buyer program, continuity in state expenditures and growth in many economic sectors. Private consumption expanded 6.8 percent YoY, while private investment increased 22.0 percent YoY.
• Manufacturing production advanced at a slower pace. Industrial output increased 10.1 percent YoY, down from the 23.0 percent YoY growth recorded in December. Domestic-oriented production and export-oriented production each grew at 2.2 percent YoY, compared to 4.0 percent YoY and 25.5 percent YoY, respectively, in December. Mixed production for both domestic and export markets rose 40.1 percent YoY, down from 58.5 percent YoY in December.
• Despite the January export growth of 15.6 percent YoY, compared to December's 13.6 percent YoY, it is expected that trade deficits will be inevitable over coming months because exports may recover only gradually amid current global economic uncertainties.

In 1Q13, we expect that despite weak global economic recovery, good traction in domestic spending and the positive effects of the government's stimuli should help prevent the Thai economy from back-slipping, though growth may be moderate, but satisfactory at 5.3 percent YoY.