Thailand current account surplus likely to reach 10 pct of GDP this year, says DBS

Current account surplus in Thailand is expected to reach 10 percent of the country’s gross domestic product, beating last year’s record of 8 percent. The huge build-up in C/A surplus has been driven by weak import demand and not by strong export growth.

Based on the balance of payments, exports shrank 1 percent in the year up to September, only to be dwarfed by the 8.4 percent fall in imports. And the weak import demand is a reflection of the lackluster domestic demand.

Growth in investment remained the major drag on the economy. Overall investment growth came in a mere 1.4 percent, its slowest in a year. Indeed, private investment growth was recorded at -0.5 percent.

"If we were to see GDP growth gaining momentum going forward, it is crucial to see significantly stronger domestic investment growth. Arguably, that may mean a sharp narrowing of the C/A surplus is warranted," DBS commented in its latest research report.