Defying Sluggish Export Growth, Thai Economy Grown Faster In 2015, Predicted To Grow More In 2016

February 15
8:18 PM 2016

The economy of Thailand has grown with acceleration during the fourth quarter of 2015 (Q4:2015) surpassing analysts' forecasts. The growth has been followed by military ruler's series of stimulus measures to boost up the economy amid political turmoil and slowed exports.  

Gross domestic product (GDP) has been expanded 2.8% during the last three months of 2015. A median survey on 22 analysts has forecast for a 2.6% growth while another separate median survey has opted for 2.7% growth. However, Thailand's estimated GDP during Q4:2015 has surpassed all the predictions by a limited margin, reports Bloomberg citing a statement from the National Economic and Social Development Board (NESDB), disclosed in Bangkok on Monday.

The GDP has been reported to rebound from 0.8% existed during the same period of 2014. While representing a comparative growth feature with the previous year, analysts have expressed cool expectations for 2016, reports Channel News Asia.

Thai Prime Minister Prayuth Chan-Ocha has accelerated budget spending to boost local demand amid falling exports. The central bank has also retained benchmark rates unchanged for a sixth straight meeting. Monetary policy remains accommodative to help the economy recover from sluggish growth, reports The Straits Times quoting Veerathai Santiprabhob, Governor for the Bank of Thailand.

The NESDB has cut its GDP projections for 2016 with forecast of 2.8% to 3.8% percent growth. The predictive figures have been reduced from 3%-4% due to weaker export growth.

Measures adopted by Thai government to counter the global slow down include supporting local spending. Money from government stimulus and budget spending are expected to be enough to boost the economy up to the current forecast at 3.3%, narrates Porametee Vimolsiri, secretary-general of the state planning agency (SPA).

Thailand's political turmoil is expected to continue while fading the outlook for private investment. But high levels of household debt have been analyzed to keep private consumption growth quiet. However, GDP has been forecast to grow by 3% during 2016, reveals a briefing note represented by Krystal Tan from Capital Economics.

Analysts predict that the military will lose support from Bangkok's influential middle class due to failure in growing Thai economy. Many of the middle class segments have supported the 2014 coup.

Meanwhile, state run Board of Investment (BoI) has revealed last month that foreign investment has grown 78% to $2.62 billion in 2015 compared to the previous year. Continuity of this growing trend in foreign investment portfolio may strengthen the military ruled regime.

Middle class segments of Thailand have been recognized as the key factor behind the coup in 2014. But the military ruler is widely criticized by these segments due to failure in propelling up economic growth. However, money generated from government stimulus and Foreign Direct Investment (FDI) may play a vital role in accelerating the Thai economy.

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