Things are looking somewhat brighter for Thailand economy

Things are beginning to look somewhat brighter for the Thailand economy. Manufacturing production has rebounded since hitting a 4-year low in Jun15, lifting capacity utilization alongside with it. Given that manufacturing makes up 1/3 of the economy, stronger growth in this sector is clearly a positive for overall GDP growth. 

Stronger export growth is still crucial going forward, but the economy would also benefit from the government's fiscal measures going into 2016. The positive spillover from an accelerated public spending is gaining traction in 3Q15, as indicated by the upswing in the private investment index. That the government is ready to spend an extra stimulus in 4Q15 should sustain the positive sentiment into 2016. 

There is still some way to go before we can be convinced that the economy has seen a bottom. After all, capacity utilization remains below 60%, levels not seen since 2009, except for the aftermath of the 2011 floods. 

"Our current GDP forecast is at 2.8% and 3.7% for 2015 and 2016 respectively. But overall investment growth needs to return to at least 6% (2.5% in 2Q15) if we were to see GDP growth back in the 3% mark. Stay tuned", notes DBS Group Research.