Watch how Thailand private sector demand fares in 2016

Thailand CPI inflation eased back to -1.0% (YoY) and core inflation to -0.9% in November is a little disconcerting. For it suggests that domestic demand remains soft going into next year. Note that private consumption was practically unchanged at 1.7% in 3Q15 while private investment growth came in at -6.6%, lowest in 2 years. Whether GDP growth will come in at 3-3.5% or 3.5-4% next year will depend on the extent of recovery in domestic demand. 

We haven't seen much of an improvement from both consumption and investment fronts this year. The latest set of data provided by the Bank of Thailand still points to relatively flat consumption and investment indexes this year. A slight uptick was seen in Sep-Oct15 but the extent is not significant. 

Nominal wage growth is practically zero. Even if the government is aggressive in rolling out its fiscal stimulus, bulk of the impact on private sector demand is likely to be witnessed only in 2H16. 4% GDP growth remains some distance away.