Thailand's 1Q GDP growth predicted to hit 4.8%

But domestic economy is softening.

According to DBS, 1Q GDP is expected to reach 4.8% YoY, with signs of moderation after the 18.9% YoY GDP growth surge in the preceding quarter. Notably, several high frequency indicators are pointing towards softening in the domestic economy.

Firstly, the private consumption index (sa) is up by just 0.3% QoQ in 1Q. In level terms, the index has been going sideways for the past six months despite the bump up in minimum wages in the early part of the year.

Here's more from DBS:

Passenger car sales and motorcycle sales have also cooled sharply over the last few months.

Secondly, the private investment index (sa) actually fell by 0.9% QoQ in 1Q, compared to an increase of 0.6% in 4Q12.

The decline can be attributed to the drop in capital goods imports. Thirdly, government spending has normalized.

In 1Q12, government spending was at an elevated level in the immediate postflood period. Compared in YoY terms, government spending is down by 25% in 1Q13. All these suggest that the growth pace of the domestic economy has likely eased.