The country's positive economic momentum was likely maintained during the fourth quarter of 2018, helping full-year growth stay on track as forecast, says a senior official at the Bank of Thailand.
Internal demand from domestic consumption and investment was the key engine driving the country's economic growth in December after positive momentum in November, said Pornpen Sodsrichai, director of the economic and policy department at the central bank.
The continued economic growth supports the Bank of Thailand's 2018 growth projection, she said.
Earlier this month the central bank trimmed its 2018 economic growth forecast to 4.2% from 4.4% predicted in September, and to 4% for 2019 from 4.2%, largely because of stalled external demand as uncertainties arose over the trade spat between the US and China.
The payment-based export growth projection was also cut to 3.7% from 5.5% predicted in September, while the forecast for 2019 was kept unchanged at 4.1%.
Thailand delivered its best annual GDP growth in five years with 4.9% in the first quarter of 2018, but the pace cooled to 4.6% in the second quarter and 3.3% in the July-September period. For the first nine months, the economy grew by 4.3% year-on-year.
Ms Pornpen said the economy in November continued to grow, mainly on private consumption, which grew 4.4% year-on-year.
Auto purchases remained strong in December, she said, as seen by robust car sales at the Thailand International Motor Expo.
Private consumption stimulated manufacturing production, particularly that of automotive and petroleum products. Private investment growth rose 3.1% in November, driven by investment in machinery and equipment.
Ms Pornpen said the number of foreign tourist arrivals rose 4.5% in November from a year earlier, mainly due to an increase in Asean tourists.
Chinese arrivals continued to decline, but the seasonally adjusted number for Chinese tourists turned positive for the first time in four months.
The value of merchandise exports expanded marginally by 0.2% year-on-year in November but fell by 0.6% if gold items are excluded.
The effect of protectionist trade policies between the US and China, coupled with the downturn in the electronics cycle and tapering demand for cars in China, led to a contraction in exports of electronic products and rubber to China.
Exports of petroleum-related products continued to expand.
Shipments of some products to the US, such as car tyres, accelerated. Other segments benefited as they substituted Chinese products.
"The marginal export growth rate of 0.2% in November was in line with the central bank's forecast," Ms Pornpen said.