Thailand: Domestic demand-driven GDP growth in Q3

3 min
Mahamoud Islam
Mahamoud Islam Senior Economist for Asia

Real GDP growth slowed to +3.3% y/y in Q3 2018 from +4.6% y/y in Q2. Exports contracted by -0.1% y/y due to less shipments of agricultural commodities, a deceleration of demand growth for manufacturing products and weaker tourism. Private consumption accelerated to +5% y/y from +4.5% in Q2 and investment gained traction to +3.9% y/y (+3.2% y/y in Q2). The Manufacturing PMI declined to 48.9 points in October (from 50.0 in September) with lower new export orders, reflecting slower growth in global demand and still heightened trade tensions bet­ween China and the U.S. Looking ahead, domestic demand will likely be the main driver in the short run, driven by continued public investment in strategic infrastructure (Eastern Economic Corridor Plan, e.g.) and ongoing accom­mo­dative monetary policy. Economic growth is expected to moderate to +3.6% in 2019 (from +4.2% in 2018).