Thailand's GDP expands 3.3% in Q1, fuelled by agriculture

Much of the growth in Thailand now comes from tourism and state spending on large projects.
Much of the growth in Thailand now comes from tourism and state spending on large projects.PHOTO: EPA

BANGKOK • Thailand's economy saw a slight pickup in the first quarter of the year, data showed yesterday, as the junta-run nation recovers from a dip caused by the recent death of its long-reigning king.

The first three months saw gross domestic product expand 3.3 per cent year on year, up from 3 per cent in the previous quarter.

Thailand spent the close of last year in national mourning after 88-year-old King Bhumibol Adulyadej, whose reign spanned seven decades, died in October.

The subdued atmosphere hit consumption as the nation toned down celebrations and festivities as a mark of respect.

Government officials will continue to mourn for a full year. But the first-quarter growth suggests business sentiment has improved.

Mr Porametee Vimolsiri, secretary-general of the economic planning agency, said the growth was fuelled by "the agriculture sector, government spending and growth in the export sector".

He said Thailand's economy was expected to grow between 3.3 and 3.8 per cent this year, compared with last year's 3.2 per cent.

While those figures would bring delight to most Western industrialised countries, Thailand still has one of the worst-performing economies in South-east Asia.

After two decades of roaring growth that saw a boom in the middle class, the nation has seen its financial fortunes stutter in recent years. Political instability, including two army coups in a decade, coupled with high household debt and falling export competitiveness have dulled Thailand Inc.

The military, which seized power in 2014 vowing to kickstart the economy, risks losing the support of sections of the middle class and business community if growth does not pick up.

Much of the growth in Thailand now comes from tourism and state spending on large projects, many of which were delayed during the years of political chaos.

Critics say that kind of growth mainly benefits Bangkok, which already accounts for a hugely disproportionate share of the economy.

In a note to clients, Capital Economics regional analyst Krystal Tan said she expected Thailand's economy to "pick up a little further in the coming quarters".

But she added that high household debt and the ongoing spectre of political instability continued to weigh on the country's longer- term prospects.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 16, 2017, with the headline 'Thailand's GDP expands 3.3% in Q1, fuelled by agriculture'. Print Edition | Subscribe