A combination of strong domestic consumption, a boost in government expenditure and higher rates of investment in the manufacturing sector – after last year’s severe flooding – has led to Thailand’s economy growing by a rate of 4.2% for the second quarter of 2012.
The countrys manufacturing sector has contributed well to Thailands economic rebound, growing by 2.7% in the second quarter in contrast to a 4.3% contraction in the preceding quarter, figures from the National Economic and Social Development Board indicate.
These developments have resulted in Thailands ECR score improving by one point since March 2012 to 57.7 in August. This follows on from a 1.7 score increase since January 2012.
Improvements across all of ECRs three main assessment factors (economic, political and structural) are to account for the gains recorded in Thailands overall ECR score.
Thailands economic-assessment score increased the most, by 1.3 points from March 2012. This shows the countrys economic assessment compares favourably to its political and structural factors, which increased by 0.4 and 0.7 respectively, suggesting that Thailands improved ECR score is due to an improved economic environment rather than a more stable political landscape.
Thailands economic-outlook indicator has improved the most out of all sub-factors used in the survey. ECR contributors have increased their scores for the countrys economic-outlook indicator by 0.4 points from March 2012, to 6.1, reflecting the improved growth forecasts Thailand recorded over the second half of 2012.
Thailands economy expanded an annual 4.2% in the second quarter of 2012, up from just 0.4% in the first three months of the year, according to figures revealed by the Financial Times. This leaves Thailands economic-outlook indicator roughly on par with other advanced economies in the region and positioning it 0.9 points above the Asian average.
Strong domestic consumption and investment have offset falls in the countrys exports. Growth in the second quarter has been driven by a combination of strong domestic consumption and investment in the public and private sectors, according to Nuchjarin Panarode, an economist at Nomura.
If you decompose the growth of 4.2% into domestic and external factors, net exports contracted by 4.2 % but the domestic sector expanded 8.6%, where 5.7% is from domestic consumption and investment, and 2.8% is from the inventory increase, she says.