But multiple headwinds loom for 4Q16.
Thailand's 3Q16 GDP grew 3.2%, vs 3.5% in the previous quarter. After seasonal adjustments, 3Q16 GDP expanded by 0.6% from 2Q16. In the first nine months, the Thai economy registered an average of 3.3% growth.
Maybank KimEng notes that this is below Bloomberg's expectation of 3.4%. However, on a YTD basis, it is still in line with BOT and NESDB’s expectation of 3.2%.
GDP growth in 3Q16 was underpinned by rising private consumption, public spending as well as a rise in the tourism sector.
Private consumption grew by 3.5% YoY in 3Q16, continuing momentum from 2Q16 of 3.8%. Meanwhile, public spending grew by 6.3% in 3Q16. However, the growth was lower vs the 11.9% in 2Q16. Finally, the services sector showed a strong growth of 14.7% in 3Q16, higher than growth of 12.6% in 2Q16.
Another key positive was that the agricultural sector saw growth rebounding to +0.9% YoY in 3Q16 vs - 1.2% in 2Q16 (after seven consecutive quarters of decline).
Looking ahead, Maybank KimEng sees multiple headwinds emerging that can affect 4Q16 and have a high risk of spilling into 1Q17, partly because of the dampening effect caused by the mourning on many economic activities; weaker tourism due to crack down of zero dollar tours and weak prices in a number of crops in the current harvest season.
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