Bangkok--7 Oct--HSBC Thailand
* The latest economic data is more positive, but there are still external risks and public investment uncertainty
* Prioritisation of both short-term stimulus measures and long-term reforms will become even more important as Thailand may head towards a planned election around the end of 2017
* We keep our conservative view on growth, expecting GDP growth of 2.8% in both 2016 and 2017
Improving prospects
Thailand's economic growth has been more stable so far this year, even if uneven, while August indicators suggest a somewhat healthier pace of recovery. Nevertheless, the economy continues to face downside risks from global economic uncertainty and possible delays of large public infrastructure projects.
To provide further support to growth, additional short-term stimulus measures have been added recently, including agricultural subsidies and small-scale investments in rural areas. According to the government, more of such temporary measures are expected to be announced soon to ensure that the growth momentum remains positive. Additionally, reform efforts have also continued, e.g. revamping of public bus services, and new public finance legislation to improve existing laws.
However, as Thailand gets ready for a planned election around the end of 2017, disruption to such plans may still occur, and prioritisation of both short-term and long-term tasks will become even more important, yet difficult. The timing of the planned election will become clearer once the constitution is effective, which is expected at end-November 2016. As such, despite improving prospects, we keep our below-consensus view on growth in our Asian Economics Quarterly report, expecting growth of 2.8% in 2016 and 2017.