Thailand’s domestic demand remains weak in 3Q
Recovery is on its way.
The recent upticks in import growth indicate that Thailand’s domestic recovery is taking place, albeit slowly.
According to a report by DBS, the current pace of recovery in the domestic economy is still broadly in line with projections going into 2015.
Barring any further shock to the economy, DBS expects expansion in the domestic economy to get back to the pre-crisis trajectory by mid-2015.
Nonetheless, there are clear downside risks to GDP growth. DBS has pencilled in 2014 GDP growth at 1.6% since May but export growth has continued to disappoint since then. And as such, DBS has not seen the kind of improvement that it has expected earlier in manufacturing production, which is an important pillar for the economy. The 3Q GDP data, due in 2 weeks’ time, is interesting to monitor since the actual fiscal spending numbers will be seen. Any sharp deviation from DBS’s 2.6% estimate for 3Q GDP growth may mean that full-year GDP growth could indeed be closer to 1%.
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