Thailand: Q4 GDP surprised to the downside – UOB

Economist Enrico Tanuwidjaja at UOB Group reviews the latest GDP figures in Thailand.

Key Takeaways

“The Thai economy’s pace of growth decelerated to 1.4% y/y in 4Q22 following a strong, upwardly revised growth of 4.6% y/y in 3Q22. Still, 2H22 accelerated to 3.0% from an average of 2.4% in 1H22. On a sequential basis, the economy contracted by 1.5% q/q sa in 4Q22 (3Q22: +1.1%).”

“Growth in the last quarter was primarily driven by higher private consumption expenditures, investment, and most notably the export of services (tourism revenue). However, export of goods slowed down, while government expenditure, including its public investment decreased.”

“Based on today’s 4Q22 GDP data, the Thai economy grew well below expectation at just 2.6% in 2022 (Bank of Thailand – BOT, consensus, and UOB forecast all were projecting 3.2% for 2022), though it is still much higher than 2021’s tepid 1.6% growth. Given the downside surprise, we revise our 2023 growth forecast lower to 3.1% as the strength of domestic economic recovery appears to be more modest than expected. Nevertheless, we continue to expect higher and steadier tourism income amidst China’s reopening to bode well for services exports performance. Less robust growth recovery will also render BOT less room to embark on an even tighter monetary policy in 2023.”