Thailand's economy grew at the fastest pace in seven quarters in the last three months of 2007 as exports of rice, automobiles and computer chips climbed.
Southeast Asia's second-biggest economy expanded 5.7 percent from a year earlier, accelerating from a revised 4.8 percent in the third quarter, the government said yesterday in Bangkok. That was more than the median estimate of a 5.3 percent gain in a Bloomberg News survey of 12 economists.
"The export performance looks phenomenal," said Ramya Suryanarayanan, an economist at DBS Bank Ltd. in Singapore, who expects the US$206 billion economy to expand 5.6 percent this year. "Worries about a strengthening Thai baht hurting exports are overdone. Growth is going to be pretty strong this year supported by pick-up in investment, consumption and exports."
Exports, which account for about 60 percent of the economy, have offset weaker domestic spending since a September 2006 military coup. The end of military rule this month may boost consumer confidence after newly elected Prime Minister Samak Sundaravej's government promised to boost budget spending and revive investment.
Shipments abroad grew 24 percent in the fourth quarter, almost double the 12.6 percent pace in the third quarter, according to central bank data. Exports totaled a record US$14.6 billion in November as demand from China and eastern Europe offset waning orders from the U.S. and Japan.
Gross domestic product expanded 1.8 percent in the fourth quarter from the previous three months, when it grew 1.5 percent, seasonally adjusted. That was higher than the 1.3 percent median estimate of economists surveyed by Bloomberg.
The export boost may not last if the U.S., the biggest buyer of Thailand's exports, slips into recession.
Goldman Sachs Group Inc. on January 14 cut its 2008 forecast for Thailand's expansion to 4 percent from an earlier estimate of 4.5 percent due to the possibility of a U.S. recession.
That compares with the Bank of Thailand's prediction of as much as 6 percent growth.
The U.S. bought 12.6 percent of Thailand's exports in 2007, followed by Japan's 11.9 percent and China's 9.7 percent.
Consumer spending rose 1.6 percent from a year earlier in the fourth quarter, slowing from 1.8 percent in the previous three months, yesterday's report showed.
Thailand's economy is expected to grow between 4.5 percent and 5.5 percent this year, compared with 4.8 percent in 2007, as recovering local demand and government spending offset slowing exports, Ampon Kittiampon, secretary general of the National Economic and Social Development Board, the government's economic advisory agency, told reporters yesterday.
Restrictions on foreign capital entering Thailand will be lifted to boost the economy, Thailand's Prime Minister Samak said on February 8.
Consumer confidence rose for a third straight month in January amid optimism the new government would spend more.
Total investment in the fourth quarter rose 4 percent, accelerating from a 2.6 percent gain in the previous quarter, yesterday's report showed.
Manufacturing gained 8.1 percent following a 5.7 percent expansion in the previous three months. Construction growth contracted 8.5 percent from growth of 0.7 percent a year earlier.
Government spending increased 16 percent, compared with the third quarter's 9.5 percent pace.
The Bank of Thailand will probably keep its benchmark interest rate unchanged on February 27 as inflation accelerates, according to six of eight economists surveyed by Bloomberg News. Two predicted a quarter percentage point cut to 3 percent.
Consumer prices rose 4.3 percent from a year earlier in January, the fastest inflation in 18 months, as fuel and food costs increased.