Despite the better-than-expected overall 4Q13 GDP, indicators measuring domestic atmosphere were rather bleak wherein domestic consumption and investment declined (-)4.5 percent YoY and (-)11.3 percent YoY, respectively; public consumption edged up minimally. Key factors contributing to 4Q13 GDP growth of 0.6 percent were swelling inventories (up 82.5 percent) and net exports of goods and services (25.3 percent higher YoY).
Overall in 2013, the Thai economy gained 2.9 percent, but that was down from 6.5 percent growth during 2012, given weaker domestic spending. Household consumption grew at the slowest pace in four years, rising 0.2 percent. Likewise, overall investment fell into the red for the first time in four years at (-)1.9 percent, while public spending growth dropped to 4.9 percent. Nevertheless, net exports of goods and service reclaimed their roles in boosting the economy for the first time in four years.
KResearch has evaluated that domestic spending will improve in 2014, enhancing economic prospects, only after political conflicts are resolved. However, other factors should also be watched, e.g., the cost of living and household debt, as well as the possibility of drought that could hurt farming income, plus trade partners' economic trends. These factors may pressure our GDP growth, which we at KResearch project in our base case as reaching 3.0 percent growth, or somewhere within 2.2-3.7 percent.
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