beyondbrics

As if on cue, Thailand today posted better-than-expected second quarter GDP to rival some of its Asian neighbours, and add further evidence that Asia can sustain blistering rates of economic growth.

The country’s year-on-year GDP growth of 9.1 per cent is reassuring: the economy doesn’t seem to have missed a beat over the nine-week demonstrations earlier this year which ended in violence. While exports led the way, the really good news comes from domestic consumption which had been sluggish to date.

This from Phatra Securities:

Consumption surprised us on the upside, rising 6.5%YoY vs 4% in 1Q.  This was led by higher spending in durable goods (especially  automobiles). Factors supporting consumption are rising employment and  higher farm income (although production fell). Consumption contributed  3.6ppts to GDP growth.

The numbers follow a slew of reappraisals on annualised GDP. Phatra has raised its estimate by 0.3 percentage points to 7 per cent. Even Standard Chartered, which had been the downside outlier at 4.1 per cent on worries that 2H export growth might falter, raised its outlook to 6.3 per cent.

Thailand has had a good run of numbers. Just last week it announced a 21 per cent rise y-o-y in exports in July – and that was a disappointment, some of which was due to unspectacular performance from the jewellery sector: Thailand is the world’s largest cutting centre for coloured stones.

Attention now swings to the Bank of Thailand, where the monetary committee is holding its six-weekly meeting on Wednesday. The central bank lifted the reference rate by 25 basis points last month, and most observers think they will lift it by another 25 basis points this time round, to 1.75 per cent.

The government’s economic planning agency, the National Economic and Social Development Board, also raised its full-year GDP forecast, prompted by strong growth from January to June.

It looks like another of Asia’s growth engines is revving up.

Related reading:
Thailand’s export recovery boosts 2010 GDP forecast, FT beyondbrics
Thailand joins Asian central bankers taking on Greenspan, FT beyondbrics
Malaysian rates: to raise or not to raise, that is the question, FTbeyondbrics