Thailand GDP posts its strongest growth in years

Thanks to bullish performance from the manufacturing industry.

Thailand’s real GDP expanded 4.3% YoY in Q3 due to strong growth posted by the manufacturing sector. The manufacturing sector contributed 1.22 percentage points to headline growth offsetting weakness in construction sector.

The hotel and restaurants sector was boosted by the boom in Chinese tourist arrivals, indicating Thailand’s strong showing in the tourism sector.

Higher expenditure figures boosted real GDP thanks to large increase in inventories.

Net exports also turned positive for the first time in four quarters as export growth grew 7.4% YoY in Q3.

BMI Research notes that Thailand’s business environment continues to be the long-term driver of growth to the economy, thanks in part to the military government has introduced sweeping reforms to Thailand’s institutions.

According to World Bank’s 2018 Ease of Doing Business report, the country’s overall rank jumped 20 places to snatch the 26th spot thanks to improved electronic, credit and payment systems.

However, BMI Research remains wary about the likelihood of increasing political risk as the interim military government steps aside for the return to civilian rule. This leads them to forecast a slowdown in real GDP growth in 2018.

The report remains optimistic that the new constitution would ensure increased accountability from institutions, allowing for policy continuity despite impending changes in national leadership.