Country Economic Forecasts > Thailand

Weak regional demand continues to weigh heavily on the Thai economy. Indeed, industrial output and exports in US$ terms fell by 4.2% and 8% respectively on the year in October. Domestic activity was more promising though, as private spending grew robustly and private investment, consumer and business confidence edged up. Public spending is also gathering momentum although concerns remain that spending plans for the current fiscal year may prove over-ambitious. Overall, we still expect GDP growth of 2.7% in 2015.Robust growth in the US and Europe, and a gradual improvement in import demand from China should underpin higher world trade growth next year. However, commodity prices remaining lower for longer will limit the recovery of exports in these sectors as around 20% of Thailands exports are mining or agricultural products. While we forecast growth will pick up to 3.1% in 2016 and 3.5% in 2017, this is below the 3.8% average seen in 2010-14. And risks remain to the downside, particularly from the uncertain domestic political outlook, while a sharper-than-expected slowdown in China would dampen both goods and services trade for Thailand.