The National and Economic and Social Development Board (NESDB) has reported that the Thai 2Q13 GDP grew 2.8 percent YoY, after expanding 5.4 percent YoY in 1Q13, suggesting that many economic activities remained sluggish. When compared to the previous quarter, the seasonally-adjusted 2Q13 GDP contracted 0.3 percent, down for the second consecutive quarter. As a result, the NESDB has revised downward their 2013 economic growth forecast to 3.8-4.3 percent, on a par with the KResearch projection.
We at KResearch expect that Thai economic performance will likely rise over 5 percent YoY in 3Q13, buoyed technically by a low 2012 base and improving external factors that will help our export sector to recover. In addition, domestic consumption should be supported by swifter budgetary disbursements toward the end of the 2013 fiscal year along with continued easing in inflation. However, due to a high 4Q12 base, 4Q13 GDP data may exhibit only moderate growth.
Given this, KResearch expects that the 2H13 economy may grow perhaps 4.0 percent YoY. We are also maintaining our forecast for 2013 at about 4 percent growth YoY, or within range of 3.8-4.3 percent YoY. Expedited budgetary disbursements may help sustain economic growth somewhat, while the Thai economy can advance above our base-case forecast if the latest economic stimuli introduced by the government are implemented successfully.
For 2014, KResearch forecasts that the Thai GDP may grow around 4.5 percent YoY, since improving global economic conditions foreseen for 2H13 should help bolster Thai exports to grow at around 7.0 percent in 2014. Household spending then should expand at almost the same level as this year despite concerns toward the rising cost of living and household debt that continue to inhibit consumer purchasing power. Investment overall next year will likely improve, especially if state investment projects are implemented as planned.
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