Domestic sector likely to drive Thai economic growth this year and next

The Thai economic growth is expected to accelerate for the whole of this year from the last year. According to a Commerzbank research note, the economy is likely to grow 3.1 percent in 2016 as compared with the 2.8 percent growth seen in 2015. This is after the economy expanded a meagre 0.9 percent in 2014 following the political uncertainty.

Domestic sector is expected to mainly drive the economic growth given the sluggish global recovery. Thailand’s economy expanded 3.4 percent in the first half of 2016. The economic growth was mainly driven by sound tourism growth, solid public investment and strong private consumption underpinned by increased farm income and current fiscal incentives.

This assisted in countering subdued growth in private investment and exports. The government is anticipating 3 percent to 3.5 percent growth in 2016.

Moreover, domestic sector is expected to continue driving the economic growth next year. But given the build-up in household debt, this might restrain domestic consumption. As such, it is quite important that the government continues to be committed in supporting infrastructure projects. Also, it might need to safeguard continued political stability and help revive investment spending for a more sustainable recovery, stated Commerzbank.

“We currently project 2017 growth of 3.2 percent”, added Commerzbank.