Reuters Monday December 3 2007
BANGKOK, Dec 3 (Reuters) - Thailand's economy grew a seasonally adjusted 1.5 percent in the third quarter, beating analyst expectations of 1.3 percent growth, the state-run National Economic and Social Development Board (NESDB) said on Monday.
KEY POINTS:
- The NESDB, which said in September it expected 2007 economic growth of 4.0-4.5 percent, now expects 4.5 percent growth.
- Q3 GDP expanded 4.9 percent from a year earlier, outpacing the second quarter's 4.3 percent, revised from 4.4 percent. (Reuters poll forecast Q3 +4.5 percent).
- GDP grew 1.3 percent in Q2 from the previous three months.
- For GDP data click on [nBAN000506] and for 2007 GDP forecasts click on [nBKT000569].
COMMENTARY:
PIMONWAN MAHUJCHARIYAWONG, ECONOMIST, KASIKORN RESEARCH CENTER
"Q3 GDP was slightly higher than expected at 4.6 percent. This should be driven by improving domestic demand. We think the higher-than expected Q3 should help GDP growth to grow at the upper range of 4.5 percent for the whole year.
"We have to monitor oil prices and the impact from the subprime crisis on the U.S. economy, which may affect our exports. These two factors will have impact on economic growth next year, when we expect growth in a range of 4.5-6 percent.
"In the worst case, every $10 rise in oil prices could cut GDP growth by 0.7 percent."
USARA WILAIPICH, ECONOMIST OF STANDARD CHARTERED BANK
"The Q3 growth came in a surprise on the upside thanks to strong exports. However, exports are unlikely to repeat their impressive performance next year amid slowing global growth.
"Therefore, Thai economic growth will be determined largely by domestic demand, which still looks weak despite early signs of recovery. That suggests relaxing fiscal policy must take a greater role in 2008."
ISARA ORDEEDOLCHEST, ECONOMIST, KTB SECURITIES
"The Q3 GDP figure came out better than expected and compared to the previous quarter. It tells us that the overall economy has improved significantly although oil prices are still high.
"However, there are a few concerns that we have to keep an eye on. One of them is how the new government is going to implement investment policies."
BACKGROUND:
- The Bank of Thailand (BoT) expects 2007 economic growth in a range of 4.3-4.8 percent after revised 5.1 percent growth in 2006.
- The central bank has halted its aggressive monetary easing since July after five rate cuts of a combined 175 basis points to 3.25 percent this year.
- It has held its key interest rate steady since July after signs of a recovery in consumption and investment. Analysts expect it to keep rates unchanged until at least the second half of 2008, even though inflation is rising.
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