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Economic Research
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1 March 2017
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Thailand
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Economic
Update
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Thailand’s
BM softened to 3.9% YoY in Dec 2016 from +4.2% in the month before. Public
demand for credit declined 26% YoY despite a slight pickup in government
spending. Things worsened as private credit demand slowed after stimulus
packages expired at the end of last year. However, the net foreign position has
improved, cushioning some of the downside.
Going
forward, we maintain our projection for Thailand’s broad money (BM) to
expand 6.1% in 2017 from +4.2% in 2016. This would be supported by:
i. Stronger
economic growth of 3.7% in 2017 compared to +3.2% last year;
ii. Improving
exports, underpinned by the adoption of fiscal stimulus simultaneously in the
G3 (US, Europe and Japan);
iii. The
return of private investment, as the kingdom moves forward with its mega
infrastructure masterplan.
Gross
international reserves rose to USD179.2bn from USD171.9bn in Dec 2016. This
is sufficient to cover 14.1 months of imports and 3.3x the short-term
external debt of the kingdom.
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Wednesday, March 1, 2017
Domestic Demand For Credit Leads Broad Money Lower
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