Growth soars to 18.9 per cent

Q4 data likely to bring 2012 figure to 6.4 per cent

The Thai economy expanded sharply year-on-year in the fourth quarter of 2012, reflecting a rebound from the impact of widespread floods in late 2011.

Gross domestic product grew by 18.9 per cent in the three months to December from a year earlier after expanding a revised 3.1 per cent in the previous quarter.

The latest figures released Monday marks the fastest growth since Thailand began compiling data in 1993, according to the report of the National Economic and Social Development Board.

Secretary-general Arkhom Termpittayapaisith said the fourth-quarter boost played a vital role in delivering 6.4 per cent growth last year, higher than the earlier 5.5 per cent forecast.

The expansion was driven by manufacturing, hotels, restaurants and construction, while robust private consumption, private investment and government spending also contributed.

Mr Arkhom said the economy grew by 3.6 per cent on a quarterly basis, a clear indication of recovery from the global slowdown.

"Fourth-quarter GDP was not just the effect of the low base in 2011, but also government stimulus, leading to double-digit growth in both consumption and investment," said Kampon Adireksombat, an economist with Tisco Securities.

"It's clear from the number that we have less downside risk on growth. We need to monitor price pressures because we've seen some cost-push pressure from higher oil prices as well as more signs of demand-pull inflation," noted the analyst from Tisco Securities.

The government's planning unit forecasts the Thai economy to grow in a range of 4.5 per cent and 5.5 per cent this year.

External demand will be a bigger factor driving the economy in the wake of the global recovery.

Domestic demand may slump as the impulse fades for stimulus and post-flood spending.

Export value is forecast to rise by 11 per cent this year, compared with 3.2 per cent in 2012, as household consumption and investment grow by 3.5 per cent and 8.9 per cent.

Headline inflation is projected in a range of 2.5 per cent to 3.5 per cent, and the current account surplus is seen at 0.9 per cent of GDP.

Consumption should grow by 3.5 per cent, slowing from 6.7 per cent in 2012 with the expiry of the first-time car buyer scheme.

The first-car tax rebate drove consumption in the last quarter of 2012 to grow by 14.8 per cent.

Total investment is forecast to grow by 8.9 per cent, compared with 13.3 per cent in 2012, with public and private investment to expand by 12 per cent and 8 per cent respectively.

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Writer: Chatrudee Theparat
Position: Business Reporter