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State of the Thai Economy September 2015

State of the Thai Economy,
September 2015


Thailand GDP grew only 2.8% in 2Q15, a rather slow pace compared to last quarter. On the expenditure side of the GDP, tourism was by far the main driver of growth. This is likely to be negatively aected by the Bangkok bombing. Without growth in tourism, there is likely to be no growth on the overall GDP. From the chart below, X (services) which is predominantly Tourism contributed 3.3%, higher than the overall growth of 2.8%.

On the production side, Service was the main driver, while agriculture and manufacturing were the main drags. Again, Service was driven by Tourism expenditure. Other key indicators pointed toward lower growth outlook. Manufacturing production and Private consumption lags behind last year’s level, while Private investment recovered. Import declined faster than Export. Unemployment decreased and stayed below 1%.

Policy interest rate remains on the downward trend to boost growth, while government spending has begun to increase. Businesses, industries as well as consumers were more pessimistic in July. Consensus growth forecast is now 3.0-3.5% for 2015 and 4.1% for 2016.




Thai economy is still in deation state in August, with both Consumer Price Index (CPI) and Product Price Index (PPI) lowered than they were a year ago. Bank’s loan is still growing, although slowly, and liquidity is slightly squeezed. Bank’s capital ratio decreased but still remained high. Non-Performing Loan (NPL) increased is still not too worrying yet.

Budget decit in 2015 has so far doubled those of last year. Public debt also increased but not too worrying yet. Positive balance of payment so far in 2015, thanks to trade surplus. External debt has been decreasing. Thai baht depreciated more than 1% in August.

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