In the first half of 2017, Thai economy grew around 3.5% from the same period last year due to the stronger rebound of export, the strong momentum of foreign tourists, and the continuous expansion of household consumption.
Thailand Economic Prospects in 2017
TRIS Rating expects that the gross domestic product (GDP) of Thailand will grow by 3.3 - 3.6% in 2017, compared with 3.2% in 2016. The Thai economy in 2017 will be driven by a recovery in exports, continued growth in the tourism industry, a rise in household expenditures. However, TRIS Rating is still concerned about external risk factors such as the risk of the global economy, the high level of household debt, and floods in Thailand.
Supporting Factors
• Exports will keep rising in the second half of this year. The economies of Thailand's major trading partners, such as the United States, Japan, and China, are improving. These nations comprise around 31% of Thai exports by value.
• The tourism industry will grow strongly in this year. Tourism showed signs of recovery after a temporary drop due to the suppression of zero-dollars tours. The crack down, which affected Chinese tourists, took effect in September 2016. The Bank of Thailand (BOT) forecast there will be 35.6 million foreign tourists in 2017.
• Household expenditures will expand in the second half of 2017. Household income in the agricultural sector and related business sectors is likely to improve as agricultural production recovers. Moreover, income in the export-oriented manufacturing sector and the tourism sector will increase in the second half of the year as exports rise and foreign tourist arrivals and tourism receipts increase.
• Private investment will recover due to expansions in machinery and equipment sector, and the construction. The manufacturing sector will rise as exports rise. Construction expenditure will rise because of increase in the number of permitted construction areas.
• Public investment is expected to speed up over the remainder of this year as disbursements from the annual government budget and the supplementary budget framework both rise. Disbursements of installment payments, as requested by project contractors, will also increase.
Risk Factors
• Risks from the global economy and commodity prices. US economic policies, such as trade policy or the implementation of trade measure to limit unfair competition from other countries, may affect investor confidence. Other external risk factors include the effect of BREXIT, an uncertain of monetary policies of the United States, Europe, and Japan, and the fluctuations of commodity prices worldwide.
• Flooding in Thailand will affect agricultural production and farm incomes. The result will be a rise in the level of household debt and a slowdown household consumption.