Economic recovery in Thailand?By Bangkok Pundit Feb 25, 2010 1:00AM UTC
Thailand’s economy bounced back in the fourth quarter, posting year-on-year growth after 12 months of contraction amid a recovery in exports, private investment and household spending.
Southeast Asia’s second-largest economy expanded by 5.8 percent in the October-December period from a year earlier, the National Economic & Social Development Board said Monday.
That ended four straight quarters of contraction that began in the last three months of 2008 amid the global financial crisis.
For all of 2009, the economy shrank by 2.3 percent.
Gross domestic product rose 3.6 percent in the October-December period from the previous quarter, double the 1.8 percent gain economists had expected, and accelerating from an upwardly revised 1.7 percent growth in the third quarter.
BP: The difference between the 3.6 percent and 5.8 percent is the earlier figure was calculated from the rise for the Jul-Sep 2009 period whereas the later figure is calculated from the rise from the Oct-Dec 2008 period. Nevertheless, as you can see the figures were better than expected.
The Bangkok Post has the 2009 figures, but also the forecast for 2010 where the forecast is now for growth of 3.5 percent to 4.5 percent in 2010. Unsurprisingly, one can see the 2009 figures were helped by the public investment and consumption. One of the reasons for these optimistic figures is the rise in exports as Bloomberg reports:
Exports to China rose 94 percent in January, and shipments to the U.S. and Japan increased 16 percent, the commerce ministry said last week. Exports to a group of five members of the Association of Southeast Asian Nations, including Singapore, Malaysia, Indonesia, Philippines and Brunei, rose 67 percent.
Even despite the problems at Map Ta Phut, Thailand is seen as a favourable place to invest by Japanese investors as the Bangkok Post reports:
Japanese investors still see Thailand as a promising economy, despite growing concern over political instability, according to a survey by the Japan Bank for International Co-operation (JBIC).
In its prospects for Japanese companies abroad over the next three years, Thailand ranked fourth in Asia after China, India and Vietnam. Thailand rose one place from 2008, replacing Russia, which dropped to fifth place.
In 2005 Thailand was ranked third by Japanese investors, after China and India. But Thailand’s investment appeal has now been eclipsed by Vietnam’s for four years
Not all the news is positive particularly in regards to the consumer’s perception as the Bangkok Post reports:
Consumers in Thailand remain pessimistic despite last year’s marginal increase in consumer confidence in the kingdom.
InsightAsia’s Consumer Confidence Index was at 87 last December, one point lower than in the previous quarter and below the neutral point of 100. Consumers are predominantly negative about the state of the economy and neutral to optimistic about their personal financial well-being.
Consumers in Thailand feel that the economy is worse than a year ago and that it is unlikely to improve over the next 12 months. The majority thinks there will be more job losses in 2010.
But these despite negative views on the economy, workers are optimistic about keeping their jobs and increasing their incomes. Consumers feel neutral about their current financial well-being and are moderately optimistic about its development in the coming year.
BP: Now, you may argue that perception is unimportant, but if consumers are predominantly negative on the economy then this will impact private consumption. Of course, perceptions can change relatively quickly when consumers see the economy getting better.
As the economy recovers this will be good news for the government so the first and second quarter GDP figures will be very interesting particularly private consumption and investment, for the Democrats.