Thailand’s economy expanded more
than estimated in the second quarter as local demand recovered
after a military coup ended months of political unrest. The baht
advanced.
Gross domestic product rose 0.9 percent in the three months
through June from the previous quarter, when it shrank a revised
1.9 percent, the National Economic & Social Development Board
said in Bangkok today. The median of 16 estimates in a Bloomberg
News survey was for 0.7 percent growth. The economy expanded 0.4
percent from a year earlier, compared to a survey estimate for
no change.
Junta leader Prayuth Chan-Ocha, who seized power on May 22,
has paid money due to rice farmers, capped fuel prices and
outlined plans for a new government to revive confidence. There
will be a “steady economic recovery” in the second half of the
year, the state planning agency said today, while cutting the
upper range of its growth forecast for 2014 to 2 percent.
“Second-quarter GDP confirms the stabilization in economic
activity,” said Weiwen Ng, a Singapore-based economist at
Australia & New Zealand Banking Group Ltd. As the political
outlook turns constructive, “we expect the unlocking of fiscal
spending to manifest itself in a V-shaped recovery for Thailand
in the second half,” he said.
The baht gained 0.2 percent to 31.807 against the dollar as
of 10:36 a.m. local time. It reached 31.763, the highest level
since July 29, and is the second-best performer in the past
three months in Asia among 11 currencies tracked by Bloomberg.
The benchmark SET Index was little changed.
Export Constraints
The state planning agency today said it forecasts full-year
growth at 1.5 to 2 percent from a range of 1.5 percent to 2.5
percent projected in May. The economy may expand 3.5 percent to
4.5 percent in 2015, it said. It cut its export growth estimate
for this year to 2 percent from 3.7 percent.
“Even though the economy will recover in the second half
and government spending will return to normal, exports (THCTEXPY) still
face constraints,” Arkhom Termpittayapaisith, secretary-general
of the state planning agency, told a news conference. “Private
investment is also expected to recover slowly.” The agency had
skipped its press conference for GDP data the previous two
quarters because of the unrest.
Thai consumer confidence rose to the highest in 11 months
in July, data earlier this month showed. Exports climbed in June
for the first time in four months.
The central bank earlier this month kept its policy
interest rate unchanged for a third straight meeting, and said
it expects a “V-shaped” recovery in the second half on rising
consumption and government spending. The monetary authority has
lowered its growth forecast for this year to 1.5 percent.
Private Consumption
Private consumption rose 0.2 percent in the second quarter
from a year earlier, expanding for the first time in four
quarters, today’s data showed. Exports slipped 0.7 percent,
while investment fell 6.9 percent.
Elsewhere in the region, Malaysia last week said the
economy grew at a stronger-than-estimated 6.4 percent pace last
quarter, while Singapore reported an unexpected expansion.
Prayuth has said Thai elections can’t be held until
late-2015 at the earliest and could be delayed further if the
situation is deemed unstable. The junta has written an interim
constitution that gives it absolute power and appointed a
National Legislative Assembly dominated by the military. The
assembly may name a new prime minister as early as this week.
To contact the reporter on this story:
Suttinee Yuvejwattana in Bangkok at
suttinee1@bloomberg.net
To contact the editors responsible for this story:
Stephanie Phang at
sphang@bloomberg.net
Rina Chandran, Tony Jordan
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