BANGKOK • Thailand's economy grew at its best pace in six years last year, with the fourth quarter beating expectations on higher domestic demand and record tourism arrivals.
The state planning agency yesterday cut its forecast for this year's exports, the main growth driver, but maintained the 3.5 to 4.5 per cent economic growth projection it made last November.
Growth data released yesterday is the last before Thailand holds an election on March 24 - the first since a 2014 military coup - that might cause political uncertainty.
Mr Kobsidthi Silpachai, head of capital markets research at Kasikornbank, said: "It is too early... to revise forecasts given the plethora of variables that can impact estimates, that is, Sino-US trade tensions, Brexit and Thai general elections and what economic and social policies will be pursued."
In October-December, South-east Asia's second-largest economy grew 3.7 per cent, compared with a Reuters poll forecast of 3.6 per cent, and the July-September quarter's revised 3.2 per cent, National Economic and Social Development Council (NESDC) data showed.
The agency put last year's growth at 4.1 per cent, the highest since 2012. Growth for 2017 was revised to 4 per cent, from 3.9 per cent.
Capital Economics, which forecasts 3 per cent growth for this year, said: "GDP (gross domestic product) growth in Thailand picked up in Q4, but it is likely to struggle for momentum in the quarters ahead due to weaker external demand.
GDP (gross domestic product) growth in Thailand picked up in Q4, but it is likely to struggle for momentum in the quarters ahead due to weaker external demand. The key risk to the outlook is the possibility of unrest if the electorate feels it is being denied free and fair elections, expected to be held on March 24.
CAPITAL ECONOMICS, which forecasts 3 per cent growth for Thailand this year.
"The key risk to the outlook is the possibility of unrest if the electorate feels it is being denied free and fair elections, expected to be held on March 24."
The government lowered this year's export growth outlook to 4.1 per cent from 4.6 per cent. Thailand's exports, worth about two-thirds of the economy, increased 7.7 per cent last year, slowing from 2017's rise of about 10 per cent.
Headline growth in Thailand's trade-driven economy has picked up in recent years on global economic recovery, but it is still not firing on all cylinders, with substantial excess industrial capacity.
Growth remains heavily reliant on exports in the face of the US-Sino trade war, while a recovery in private consumption has been constrained by high household debt.
Annual exports in the December quarter rose at a slower pace of 2.3 per cent, while private consumption increased 5.3 per cent from a year earlier, and private investment was up 5.5 per cent. Public investment contracted 0.1 per cent, NESDC data showed.
In the last three months of last year, tourist arrivals rose 4.3 per cent from a year earlier, up from 1.9 per cent the previous quarter, as the number of Chinese visitors - reduced by a July boat accident that killed 47 - rebounded.