- Surging tourist arrivals also help offset weak local demand
- NESDB warns that exports may shrink for a fourth straight year
Thailand’s economy grew more than analysts estimated in the first quarter as the military government’s spending helped counter weak local demand and exports.
Gross domestic product expanded 3.2 percent in the three months through March from a year earlier, the National Economic and Social Development Board said in Bangkok Monday. That compares with the 2.8 percent median estimate in a Bloomberg News survey of 21 analysts. GDP grew 0.9 percent from the previous three months, compared with 0.6 percent median estimate.
Prime Minister Prayuth Chan-Ocha has issued a series of economic stimulus measures valued at more than 645.4 billion baht ($18 billion) since September last year to help shore up local demand. The Bank of Thailand last week left its benchmark interest rate unchanged for an eighth straight meeting to help support the economy.
“Robust growth in the tourism sector and high government budget disbursement should still be the main driver of the Thai economy,” said Peerawat Samranchit, an economist at Bangkok-based TMB Bank Pcl, said before the data was released. “Domestic demand remains fragile.”
The baht gained 0.2 percent to 35.38 against the dollar as of 5:23 p.m. in Bangkok. The benchmark SET Index of stocks rose 0.2 percent.
The NESDB revised its estimate for GDP growth this year to a range of 3.0 percent to 3.5 percent from an earlier forecast of 2.8 percent to 3.8 percent. Growth for the remainder of the year will be faster than in the first quarter, Porametee Vimolsiri, secretary-general of the state planning agency, said at a briefing in Bangkok Monday.
The first-quarter performance was “good news, and will be a turning point for confidence toward Thailand,” Deputy Prime Minister Somkid Jatusripitak said Monday. “This will show that the Thai economy has recovered.”
The government will continue to inject money into areas of the economy that are struggling, including farming communities, Finance Minister Apisak Tantivorawong said Monday. Thailand’s agricultural industry shrank by 1.5 percent in the first quarter, according to the NESDB, which is also now predicting a fourth straight annual decline in exports.
Thai exports contracted 1.4 percent in the first quarter, while imports shrank 14.4 percent over the period. Tourist arrivals rose 15.5 percent in the first quarter from the same period last year to 9.04 million, according to the central bank.