Thailand's Q3 GDP rose 2.4% despite slowing consumption

Private consumption slipped 4.2% in the same quarter.

Thailand’s GDP climbed 2.4% YoY in Q3 on the back of government expenditure and investments posting higher growth rates compared to Q2, reported OCBC.

Expenditure rose to 2% in Q3 from only 1% in the previous quarter, whilst investments expanded close to 4% in Q3 from Q2’s 2%. 

On the other hand, private consumption slid 4.2% YoY in Q3, marking the fourth consecutive quarter of falling growth.

The slowdown in household consumption fell to a five-quarter low, which shows that the stresses of poor trade are starting to hurt domestic private expenditure, noted OCBC.

OCBC added that a turnaround in exports will be sorely needed to engineer a rebound in household consumption. However, although exports might have bottomed out, a sharp rebound still looks unlikely.

Whilst still a contraction, the pace of export movements in Q3 at -1.0% YoY has markedly improved, compared to -6.1% in Q1 and -7.9% in Q2. A pickup in the external demand for manufactured goods, especially electronics and automobiles, are needed to stem the three consecutive contractions in the exports.

OCBC sights that Thailand’s GDP will grow to 2.7%, slightly lower than a previous estimate of 2.8%, whilst 2020 GDP growth rate is expected at 2.9%.