Sunday, July 06, 2008

Thailand Q1 2008 GDP

In the first quarter of 2008, Thai gross domestic product expanded 6.0% over the same period last year, which was above the 5.7% growth registered in the fourth quarter but in line with market expectations. The result continued the rising trend in place since the second quarter of last year and, in fact, constituted the fastest growth pace in two years.

The improvement over the previous quarter was entirely due to a strengthening domestic sector, as the contribution of the external sector to the economy decreased compared to the third quarter. Both private consumption and investment accelerated compared to the final quarter of last year. Private consumption expanded a subdued 2.6% year-on-year, which was, however, up from the even more paltry 1.8% annual growth observed in the previous quarter. Investment accelerated from 4.0% annual growth in the fourth quarter to 5.4%.

In the external sector, export growth quickened a notch (Q4: +8.5% year-on-year, Q1: +8.7% yoy), but imports accelerated more and added 10.3% (Q4: +6.2% yoy). At the sector level, the improvement compared to the previous quarter was due to accelerations in both agriculture and industry, whereas services slowed down. A quarter-on-quarter analysis corroborates the picture of a strong economy suggested by the annual data, as GDP expanded 1.44% over the previous quarter in seasonally adjusted terms. The government aims for the economy to grow 6.0% this year, and recently stated that it will step up public spending in order to meet this target.