Momentum builds up for recovery

Export growth, rising farm incomes and increased government spending pointed to further economic expansion in April, Krisda Chinavicharana, director general of the Fiscal Policy Office, told a press conference following the release of its monthly economic report yesterday.
The economy in the second quarter would build on the 3.3 per cent growth in gross domestic product posted for the three months of this year, he said
Sales of motor vehicle and motorcycles for personal use rose 23.2 per cent and 16.3 per cent, respectively, in April, said Krisda. However, value-added tax collection contracted by 2.6 per cent, suggesting consumers remains cautious.
Sales of commercial vehicles climbed 10.1 per cent, extending gains to a fourth consecutive month and imports of capital good increased 8.5 per cent. These figures suggest a recovery in private investment after a contraction in the first quarter.
 However, sales of cement fell 0.9 per cent, reflecting the subdued state of the property sector. 
Exports in April rose 8.5 per cent year on year to US$16.8 billion, translating into rising incomes for farmers, especially in the rubber sector Agriculture production index jumped 27.1 per cent, or 3.3 per cent on a seasonal adjustment. 
However, the Thai Industries Sentiment Index in April was at 86.4, decreasing from the previous month as manufacturers worried about the rising costs of production. 
Elsewhere, tourist arrivals rose 7 per cent to 2.8 million, with significant increases in the number of visitors from Hong Kong, Russia, Malaysia and South Korea, Krisda.
The Finance Ministry forecasts that economic growth will be 3.6 per cent this year, shading the 3.5 per cent projected by the National Economic and Social Development Board (NESDB). 

Government spending 
Krisda said he was confident that government spending on investment would proceed as planned and would boost economy for the rest of the year. 
Government revenue in the first seven months of the current fiscal year reached Bt1.2 trillion, exceeding the target by Bt4.5 billion, he said.
The country’s regions also were sharing in the recovery, Krisda said. 
In the Southern provinces, consumers spent more on durable goods, such as cars and motorcycles, contributing to 3.4 per cent of VAT revenue in April. 
The expanding tourism sector and rising incomes of rubber and shrimp producers also contributed to the VAT take and overall consumption. 
In the Northeast, private consumption and investment expanded as car and motorcycle sales rose 7.9 per cent and 12.3 per cent, respectively. 
New investment soared 375.5 per cent on private-sector investment in an in electricity generating plant in Nakhon Ratchasrima. 
For the Eastern region, consumption, investment and tourism also drove economy. In the North, consumption and agriculture led the way.
For the Western region, there were also signs of economic recovery, mainly driven by consumption and tourism. And in the Central region, consumption, investment, agriculture and tourism played the major roles in boosting the economy. Consumers also bought more new cars, commercial trucks and motorcycles. 
However, an analyst took a more guarded view on the seemingly attractive figures presented by the Finance Ministry yesterday and the optimistic GDP forecasts for 2017 from both the ministry and the NESDB.
Jiralawan Tangitvet, managing director of Kasikorn Securities, said the rise in exports might be due partly to Chinese manufacturers having speeded up their production lines and shipments to the US in fear of a changing trade policy under President Donald Trump.
 “This could be a result of the Trump Effect,” she said.