GDP adds 3.3% for Q1 but private investment dips

Releasing a report on the quarterly growth, Porametee Vimolsiri, secretary-general of the National Economic and Social Development Board, said the first-quarter figure shaded the 3-per-cent growth recorded for the fourth quarter of last year growth and the 2016 expansion of 3.2 per cent.
A 6.6-per-cent jump in export value to US$56.2 billion (Bt1.94 trillion) for the first three months reflects a recovery under way in the export sector in line with an improving global economy, Porametee said, citing the highest growth rate for overseas shipments in the past 17 quarters.
 He said government spending also contributed to the expansion in gross domestic product, as public investment rose 9.7 per cent for the first quarter.
Consumer spending increased 3.2 per cent in the first quarter from the year-earlier period, due largely to rising farm incomes. 
Porametee said he was optimistic that household consumption would continue to expand as the prices of farm products rose and farm production picked up after the end of the drought.
The agricultural sector has now expanded for three consecutive quarters, this time by 7.7 per cent, but manufacturing grew just 1.2 per cent, decelerating from a 2.2-per-cent pace in the fourth quarter of 2016, the NESDB said. 

‘Positive’ in second half 
On the slump in private investment, down 1.1 per cent from the same quarter last year, Porametee said the export recovery had not yet translated into new investment. 
“Private investment usually lags, improving only after export expansion continues for a while and it is expected to be positive in the second half of the year,” he said.
Manufacturing has long suffered from excess production capacity. The sector makes use of only 63 per cent of its capacity, resulting in many of the country’s production facilities being idle. 
Private companies are expected to put in new investment after capacity utilisation reaches 65-70 per cent. 
The NESDB in February projected full-year GDP growth of 3.3-3.8 per cent, compared with an earlier projection of 3-4 per cent.
Porametee said the agency was now confident the economy would expand by at least 3.5 per cent this year, up from 3.2 per cent last year.
The NESDB yesterday upgraded its forecast for export growth to 3.6 per cent for 2017, up from its previous forecast of 2.9 per cent in dollar terms.
Porametee said risks to growth included uncertainties in the global economy that could result from any protectionist moves in US trade policy. The US government is reviewing its trade policies with 16 countries, including Thailand, that have trade surpluses with the United States.
If Washington were to punish its own importers that took advantage of products cheaper than US-made ones, this would hurt Thai exports even though Thailand may not be the intended target of the action, Porametee warned.
Tourism was another bright sector in the first-quarter report card, with spending increasing 3.9 per cent.