Thailand full-year economic growth seen at 3.2 pct y/y, says ANZ Research

Thailand’s full-year economic growth is seen at 3.2 percent y/y. This level of growth is unlikely to impact inflation in a significant manner. Accordingly, monetary policy should also remain accommodative throughout this year, ANZ Research reported.

The country’s growth accelerated to 3.3 percent y/y on the back of stronger goods exports and tourism activity. The strengthening of exports also favourably impacted household consumption. By contrast, investment activity remained subdued, mainly reflecting excess capacity in the manufacturing sector.

The recovery in goods and services exports propped up sequential growth to 1.3 percent q/q sa. Private consumption also strengthened to 3.2 percent y/y from 2.5 percent y/y, presumably reflecting an improvement in tradable sector and rural incomes.

Looking ahead, private consumption should benefit further from tax relief measures for middle and higher income households as well as the likely repayment of loans related to the first time car buyer incentive programme introduced in 2011. Both developments should boost household disposable incomes. However, the main issue to monitor would be the sustainability of exports and incomes in the tradable sector, by implication, the report added.