Cooling Domestic Demand Presents Downside Risks To 2014 Growth
BMI View: The latest real GDP growth reading came in disappointingly weak at a seasonally-adjusted 1.3% quarter-on-quarter (q-o-q) in Q313. Crucially, the latest figures suggest that cooling external demand is beginning to impact household spending and business investment. We caution that political tensions could also further dampen investor sentiment and economic activity as we head into 2014. Subsequently, we have downgraded our 2013 real GDP growth forecast from 4.0% to 3.6%, and we expect growth to remain subdued at 4.3% in 2014.
Thailand's real GDP growth print came in disappointingly weak at just 2.7% year-on-year (y-o-y) in Q313, missing the Bloomberg consensus estimate of 2.9%. On a seasonally-adjusted basis, the economy expanded by 1.3% quarter-on-quarter (q-o-q) in Q313, up from a revised flat growth figure in the previous quarter. Although the latest reading remains generally consistent with our view that cooling external demand will continue to weigh on headline growth over the coming quarters, we are beginning to see more evidence of weakness in other areas of the economy.
Businesses And Households Cut Back On Spending
|Contraction In Private Sector Investment A Warning Sign For Economy|
|Thailand - Contribution to Real GDP Growth by Expenditure (pp)|