External Upswing Helps Smoothen Domestic Transition

Economic Research	5 April 2017
Thailand
Economic Outlook
External Upswing Helps Smoothen Domestic Transition Thailand’s GDP slowed to +3% YoY in 4Q16, undermined by a pullback in private consumption and sharply lower tourist arrivals. Going forward, things are looking up, with the brighter external outlook set to prop up Thailand’s firming domestic growth. We reiterate our projection for 2017 GDP to grow 3.7%. The reasons for our confidence include: 1. Export recovery should continue to be supported by fiscal stimulus in G3 (US, Japan, EU) economies, and stabilising commodity prices; 2. Strong prospects for a significant increase in private investments, especially in areas related to Thailand’s infrastructure masterplan; 3. Rising private consumption following the completion of the mourning period for the late king; 4. Continuation of government-led mega infrastructure construction works. With the return of export growth, we believe that the Government may tone down its stimulus measures and focus on rebalancing the economy for more balanced growth going forward. Economist:  Ng Kee Chou | +603 9280 2179