Signals reflected by Thailand's December economic indicators remained static, though domestic consumption continued to drive the overall economy. However, global economic uncertainties during the yearend transition period weighed down on the manufacturing and export sectors, thus slowing their MoM growth. Details of the latest economic indicators are summarized below:
- Slowing international purchase orders resulted in MoM declines in manufacturing production and exports by 5.0 percent and 2.4 percent, respectively, down from 9.1 percent and 6.7 percent in November. However, we expect that they will begin to recover in early 2013, given the initial progress seen in solving US fiscal problems, along with rosier economic prospects in China – a major trade partner.
- Ebbing exports squeezed our trade surplus down to about USD300 million, compared to USD600 million in November. KResearch has assessed that our weakening trade balance will likely continue over the coming months while the export value should recover at a measured pace amid rising costs and the appreciating Baht.
As indicated by December economic data, private consumption – being a key economic driver last year – began to ease amid a slow recovery in the export sector. However, robust 4Q12 private consumption growth (especially in November), due somewhat to a low 4Q11 base as a result of the catastrophic flooding then, plus an expectation of high stockpiles in the industrial sector are factors leading us to believe that the 4Q12 GDP will have grown a bit better than originally forecast at 14.0 percent YoY. Given this, we expect that the Thai 2012 economy may have expanded by perhaps 5.3 percent, slightly higher than our previous estimate at 5.0 percent.
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