BANGKOK — Thailand produced its fastest economic growth in five years in the first quarter, boosted by strong exports and tourism plus a slight firming in long-weak private consumption.
With the robust January-March performance, the national planning agency raised its 2018 growth forecast to 4.2-4.7% from 3.6-4.6% seen three months ago.
The agency said on Monday it didn’t lift its forecast much as annual growth “is likely to slow because of a high base effect” for coming periods.
Thammarat Kittisiripat, economist of KT Zmico Securities, said the new outlook “suggests smaller downside risks to growth, with a good sign on improving domestic demand and government spending.”
He predicts 2018 growth of 4.2%, following last year’s 3.9%, the best in five years.
Capital Economics said Thailand started 2018 on a strong note but growth “may now have peaked,” though the economy should remain in good health.
Gross domestic product grew a seasonally adjusted 2% in the first quarter from the fourth, the fastest pace since 2012’s last quarter, the National Economic and Social Development Board (NESDB) said.
The pace was nearly twice a Reuters poll’s 1.05% forecast and far above October-December’s 0.5%.
January-March’s annual pace was 4.8% — above the poll’s 4% and the best for a quarter since January-March 2013.
Deputy Prime Minister Somkid Jatusripitak told reporters “it took us five years” to get growth this high, and the level should boost the private sector’s confidence.
The NESDB raised its 2018 export growth forecast to 8.9% from 6.8% seen three months ago.
Exports, a growth driver, surged about 10% in 2017 after years of poor numbers, and also expanded 10% in January-March, with solid shipments of cars, electronics and hard drives.
RELIANCE ON EXPORTS
Southeast Asia’s second-largest economy has recorded better headline growth in the last few years, supported by solid global recovery, but it is not yet firing on all cylinders.
Growth remains heavily reliant on exports, and private investment and consumption remain tepid, curbed by high household debt, while excess industrial capacity remains a problem.
The military government is trying to ramp up spending and large infrastructure projects to spur activity, but disbursement has slowed following stricter procurement rules imposed in 2017’s second half.
In January-March, tourist numbers surged 15.4%.
Private consumption was up 3.6%, compared with 3.4% a year earlier, and private investment rose 3.1%.
Investments by state enterprise rose 11.5% from a year earlier but spending by the government contracted, NESDB data showed.
The agricultural sector rebounded 6.5% in the first quarter from a year earlier, on better crops, after a 1.3% fall in October-December.
With inflation subdued, Thailand’s central bank is widely expected to keep interest rates near record lows the rest of 2018, though some predict policy tightening late in the year.
The policy rate has been 1.50% since a quarter-point cut in April 2015.
The central bank next reviews policy on June 20. — Reuters

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