The Thai economy performed better than expected in 1H17. The 2Q17 GDP surged 3.7 percent, outshining initial market expectations (consensuses at Bloomberg and Reuters) that had earlier forecast 3.2 percent growth. The increase is being attributed to rising exports and household consumption, while public investment continues to have a pivotal role toward driving the economy amid a gradual recovery in private investment.
KResearch sees that since 1H17 GDP expansion has outpaced initial forecasts, it could possibly push GDP growth closer to the upper end of our target (3.0-3.6 percent YoY). However, over the rest of the year, the economy will still likely face a number of challenges. Exports are being pressured by the appreciating Thai Baht and flooding may affect purchasing power. So, we are keeping our estimate on Thai GDP growth for 2017 at 3.4 percent, pending further assessments toward factors that may affect it later on.