BANGKOK, Nov 19: Thailand’s economy grew a stronger-than-expected 1.2 percent in the third quarter from the previous three months, which most economists think will lead the central bank to keep its policy rate on hold until 2013.
Third-quarter growth was slower than April-June’s revised 2.8 percent, as the weakening global economy hit exports and production. But the latest pace was higher than the 0.9 percent quarterly gain forecast in a Reuters poll.
The Bank of Thailand’s policy committee, which surprisingly cut rates in October, holds its last meeting of the year on Nov. 28.
‘We believe that policy rate will remain on an easing bias, although we do not expect the BOT to cut rate by another 25 basis points until the first half of 2013,’ said Usara Wilaipich, senior economist at Standard Chartered Bank in Bangkok.
The National Economic and Social Development Board (NESDB) on Monday also said that gross domestic product in the third quarter expanded 3.0 percent from a year earlier, almost matching the 3.1 percent forecast by the polled economists, and compared with revised annual growth of 4.4 percent in the second quarter.
Like in many of Southeast Asian nations, strong domestic demand and tourism have helped shore up Thailand’s economy even as exports and industrial output slumped.
However, domestic consumption and investment are also starting to wane. Activity in the first half of the year was buoyed to a large extent by spending on reconstruction and replacement equipment after devastating floods in late 2011, but much of that rebuilding has now been completed.
Exports fell 3 percent in the third quarter from a year earlier as global demand for Asian goods deteriorated, the agency said.
Manufacturing slumped 10.2 percent from a year before, even as factories restored more capacity after the floods. Industrial goods account for about 65 percent of total shipments.
Overall investment rose 15.5 percent in the third quarter from a year before while overall consumption was up 6.5 percent.
The NESDB expected the economy to grow 5.5 percent in 2012, compared with its previous forecast of 5.5-6.0 percent. Due to the floods, growth in 2011 was only 0.1 percent.
The Thai agency forecast GDP growth of 4.5-5.5 percent for 2013. Economists polled by Reuters have predicted growth of 5.3 percent in 2012 and 4.5 percent for 2013.
The NESDB forecast 2012 headline inflation of 3.0 percent after 2.9-3.4 percent earlier. The central bank has predicted 3.0 percent.
The NESDB cut its export growth forecast to 5.5 percent from 7.3 percent for this year, but forecast export growth of 12.2 percent. (agencies)
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