The Thai economy rose 4.3 percent YoY in 3Q17, bettering the consensus survey that estimated 3.8 percent YoY. While external sectors were the key supporters of the overall economy, household spending and private investment sustained growth over the previous quarter. However, the agricultural GDP contracted QoQ in 3Q17 amid falling crop prices, which also pressured farm income. Improving manufacturing production has not yet produced pass-through effects to the labor market, reflected from lower employment, thus impeding household spending.
The Thai economy will likely continue to record high growth in 4Q17 of at least on a par with 3Q17, mainly buoyed by international trade and government stimuli in assistance to low-income earners and flood victims, plus a tax break on retail shopping. It is expected that 2H17 GDP growth should be not less than 4.0 percent YoY.
KResearch views that, given high GDP growth in 3Q17 and 4Q17, 2H17 performance should reach over 4.0 percent YoY, so, full-year growth should reach close to the upper end of our forecast (3.5-4.0 percent YoY).