22 Apr 2017

ADB predicts 3.5% Thai growth based on higher exports, consumption

Cargo containers sit in stacks at Laem Chabang port in Chon Buri province. Exports are projected to drive growth this year. The Thai economy is expected to expand by 3.5% based on an export recovery and domestic public spending this year, with momentum set to continue next year, raising growth to 3.6%, says the Asian Development Bank (ADB).

The ADB expects Thai merchandise exports to grow 2% this year and 4% in 2018, supported by a stronger global economic recovery and rising commodity prices.

In addition to rising farm income, the Manila-based lender expects private investment to grow 3-4% this year, partly because of a low base last year. Based on the recent recovery of merchandise exports, some sectors such as electronics have almost reached full capacity and are expected to invest soon to expand capacity, Mrs Luxmon said. “Although average utilisation of industrial capacity stands at 60.5%, in some subsectors such as electronics, electrical parts and chemical products the utilisation rate exceeds 90%,” she said.

Large government infrastructure projects are also expected to spur private investment by boosting economic confidence. “Public investment will be a key growth driver over the short term if the government can quickly implement its plan,” Mrs Luxmon said.