Strong private consumption, coupled with a rise in government spending and a positive rebound in the export of goods and services, enabled Thailand's economy to grow by 18.9% in the final quarter of 2012, according to economic and financial analysis firm Roubini Global Economics. Private consumption increased by 12.2% year on year, led by the government’s economic stimulus, which was deployed to offset the economic impact of the floods that devastated parts of the country in 2011.
According to Roubini, Thailand’s exports increased by 13.5% to $18.11bn in 2012, and this was supported by a rapid rise in the demand for automobiles and electronics. In addition, manufactured exports surged by 28.5%, as the shipment of automobiles, electronics and construction materials remained robust in 2012.
Thailand’s economic growth was broad-based in 2012, and the country’s GDP could expand by 6% in 2013. Growth in private consumption was underpinned by the government’s stimulus policies, which included relatively low interest rate loans to small and medium-sized enterprises that were affected by the floods as well as a first-time car buyer rebate. This caused a significant rise in vehicle sales as well as a rebound in the manufacturing sector, which grew by 37.4% in the final quarter of 2012, after contracting by 1.1% in the previous quarter.
Roubini also found that Thailand’s exports grew by 3.1% to $229.52bn in 2012, a rise that was largely led by the electronics, automobiles and auto parts industries. Imports increased by 8.2% to $247.6bn and the country ran a trade deficit of $18.07bn due to its demand for capital goods, gold and industrial machinery.
Although Thailand is expected to witness growing external demand in 2013, Roubini highlighted the end of the government's first-time car buyer rebate as a key downside that may weigh on its economic prospects.