Mr. Phisit Phuapan, Director of the Macroeconomic Policy Bureau at the Fiscal Policy Office (FPO), revealed that he expects Thailand's economy in the fourth quarter of 2018 to grow better than the previous quarter, driven by improved domestic factors, particularly in consumption and domestic spending, which have shown a clear improvement compared to the third quarter of 2018. The Ministry of Finance plans to revise its economic growth forecast (GDP) for 2018 in January 2019, from the current estimate of 4.5%.

 

Previously, the National Economic and Social Development Board (NESDB) announced that the economy grew by 4.9% in the first quarter of 2018, 4.6% in the second quarter, and saw a decline to 3.3% in the third quarter. They have also revised the 2018 economic forecast down to 4.2%. The Ministry of Finance will reassess the economic figures again in December before considering adjusting the GDP forecast.

 

“We still need to monitor the overall economic situation in December 2018. The key drivers of the economy this month are private consumption and exports. From what we have observed in the past two months, domestic factors continue to support economic growth effectively,” Mr. Phisit stated.

 

Regarding the interest rate hike by the Monetary Policy Committee (MPC), it is initially viewed that in the short term, it will not impact the overall economy of Thailand this year, as the implementation of monetary policy measures takes time to transmit their effects into the economy. Additionally, Thailand currently has high liquidity in the system, and fiscal policy continues to support economic growth effectively.

 

In November 2018, the Thai economy continued to grow well due to domestic spending, with value-added tax (VAT) increasing by 9.6%, the highest in four months. Investment in the private sector in machinery also reflected a significant growth in commercial vehicle sales, which increased by 26.9%. Furthermore, tourism has started to expand well after the government addressed issues and implemented visa-free measures.

 

Mr. Pongnakorn Pochakorn, Director of the Macroeconomic Analysis Division at the FPO, stated that although Thailand's economy has shown a continuous quarterly decline, the consumption engine continues to grow, with growth rates of 3.7% in the first quarter, 4.5% in the second quarter, and 5% in the third quarter.

 

Moreover, looking at the VAT growth, which primarily reflects domestic consumption, it grew by 4.1% in the first quarter, 6% in the second quarter, and 6.6% in the third quarter, with VAT growth reaching 8.4% in October and November, indicating that the domestic economy continues to expand well.

 

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