Highs in key indices spur optimism for GDP
The Thai economy got off to a strong start in 2018, with solid private consumption and tourist arrivals, and exports and consumer confidence hitting multi-year records in January.
Multi-year highs in the industrial and consumer confidence indices suggest positive economic growth this year, said Pornchai Thiraveja, an adviser to the Fiscal Policy Office (FPO).
While exports were not as robust last month for Thailand as in several Asian neighbours such as Vietnam, they were still positive given the global economic recovery, he said.
Thailand's merchandise shipments grew at the fastest rate in more than five years in January, surging 17.6% year-on-year to US$20.1 billion (629 billion baht), reported the Commerce Ministry. The country's 2017 shipments totalled US$237 billion, up 9.9% year-on-year.
Consumer confidence rose for the sixth straight month in January, hitting a three-year high at 67, while the Thai Industries Sentiment Index reached its highest point in 36 months at 91.
This prompted the FPO in January to upgrade its economic growth forecast for this year to 4.2% from 3.8% and raise its estimate for exports, which make up 70% of GDP, to 6.6% from the 5.7% growth projected three months ago.
The Bank of Thailand recently hinted it might upgrade its GDP growth forecast of 3.9% for 2018 in light of the larger boost expected from state investment.
Mr Pornchai said value-added tax (VAT), a proxy of domestic consumption, soared 6.9% year-on-year in January, with VAT on domestic purchases jumping 6.5% and VAT on imported goods rising 7.6%.
Other economic indicators last month also pointed to the bright outlook. Passenger car sales surged 27.3% year-on-year in January, marking a 13-month rising streak, motorcycle sales climbed 3.5% higher, commercial pickup truck sales soared 10.2% and tax on real estate transactions expanded by 21.1%.
In the meantime, Soraphol Tulayasathien, director of the bureau of macroeconomic policy under the FPO, said January's robust exports will help the country's economic growth achieve the Finance Ministry's think tank forecast at 4.2% this year.
He said the farm product index in January jumped 13% year-on-year, while the real farm income contraction dropped to 3.9% from 4% in December.
Thailand's GDP rose by 3.9% to a five-year high in 2017, slightly below the FPO's projection of 4%.