Bouyant Thai exports lift trade growth

May 16, 2017

BANGKOK - Growth in Thailand has accelerated to 3.3% y/y on the back of stronger goods exports and tourism activity. The strengthening of exports also favourably impacted household consumption. By contrast, investment activity remained subdued at 1.7%, mainly reflecting excess capacity in the manufacturing sector.

ANZ Bank says that unless growth becomes more broad-based in coming quarters, inflationary pressures are unlikely to harden. “At this point, we do not expect any change in the current accommodative monetary policy stance through 2017.”

Looking ahead, ANZ says private consumption should benefit further from tax relief measures for middle and higher income households, as well as the likely repayment of loans related to the first-time car buyer incentive programme introduced in 2011.
“Both developments should boost household disposable incomes. However, the main issue to monitor would be the sustainability of exports and incomes in the tradables sector, by implication,” ANZ says.
“Overall, we continue to forecast full year 2017 growth at 3.2% y/y. In our view, this level of growth is unlikely to impact inflation in a significant manner. Accordingly, monetary policy should remain accommodative through 2017.” www.live.anz.com (ATI).