Thailand’s GDP growth expected to accelerate to 4.5%, tops

Amid higher fiscal spending.

GDP growth is expected to accelerate to 3.5-4.5% in 2015, up from around 1% this year.

According to a report by DBS, the Bank of Thailand (BOT) reiterates that the current monetary policy stance is still supportive of GDP growth, especially considering higher fiscal spending next year. A higher domestic demand is in the offing in 2015. 

DBS adds that export growth is likely to be in the negative for full-year 2014 and another tepid export growth in October is likely to confirm this (DBS forecast: -0.4% YoY). In 2012, exports grew a mere 3%. Then, export growth was flat in 2013 and it is now projected to be -1% in 2014. It is little wonder that capacity utilization is down to its early-2012 level, when the economy was just recovering from the 2011 floods. Given the low base effects, export will post decent growth numbers too in 2015.