Global trade to lift Thai GDP

Global trade to lift Thai GDP

Exports surging after significant pickup

Workers wash windows at Centerpoint of Siam Square. The stronger world economy is expected to carry export momentum into 2018. APICHIT JINAKUL
Workers wash windows at Centerpoint of Siam Square. The stronger world economy is expected to carry export momentum into 2018. APICHIT JINAKUL

Spillover effects on the Thai economy from improving global trade are expected to continue into 2018, while this year's GDP growth could outpace the October forecast of 3.8% made by the Fiscal Policy Office (FPO).

The FPO this month predicted global economic growth of 3.9% in 2017, up from October's projection of 3.6%, said Pornchai Thiraveja, an adviser to the FPO.

The Finance Ministry's think tank also raised its 2018 global economic growth forecast to 3.8% from 3.6%.

The significant pickup in global trade contributed to surprise export growth of 10% year-on-year in the 11 months to November, well above the FPO's forecast of 8.5% for the full year.

With the sharp surge in merchandise shipments, the National Economic and Social Development Board and the Bank of Thailand are optimistic that Thai economic growth this year will reach 3.9%.

The FPO in its quarterly economic forecast in October jumped on the bandwagon by raising its 2017 GDP growth forecast to 3.8% from 3.6% predicted three months earlier on the back of strong export growth. It also forecast the economy will expand by 3.8% next year.

Even though the FPO has painted a brighter outlook for the 2018 economy, it said risks remain.

Those risks include 3-4 potential US Federal Reserve rate hikes, geopolitical tensions -- particularly in the Korean Peninsula and Middle East -- and the ability for state investment plans to stay on track.

Warotai Kosolpisitkul, deputy director-general of the FPO, said global trade growth this year surpassed that of world economic growth after the former had expanded at a slower pace than the latter over the previous three years.

That strong global trade will strengthen Thai export growth, he said.

In November, domestic consumption as seen in durable goods such as passenger cars also picked up steam, said Mr Warotai.

Passenger car registration last month surged to 60,000 units from 30,000-40,000 units a month over the past several months.

Value-added tax was another indicator that reflected improved domestic consumption in November, inching up by 1.6% year-on-year last month.

Capital goods imports, a proxy of private investment, jumped by 10.1% year-on-year in November.

The number of foreign tourists visiting Thailand rose by 23.2% year-on-year last month.

But the farm production index fell by 0.6% and farm income dropped by 6% in November.

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