The growth forecast for 2016 is changed to 3.00-3.50 per cent (mid 3.25 per cent), from 2.80-3.80 per cent (mid 3.30 per cent). This is against Bank of Thailand’s 3.10 per cent forecast.

NESDB Secretary-General Porametee Vimolsiri noted that risk factors remain, ranging from global economic recovery, decreases in commodity prices to financial market volatility which would influence the dollar/baht exchange rates.

He urged the government to continue with its focus on public spending and infrastructure investment projects as well as ensure the efficiency of economic stimulus measures.

The NESDB revealed today that the economy expanded 3.2 per cent in the first quarter, compared to the quarterly growth rate of 2.8 per cent in the fourth quarter of last year. Boosting the economy were mainly government spending and an increase in household spending as well as more tourist arrivals. Meanwhile, exports in the first three months of this year showed 1.4 per cent contraction from the same period last year, to US$52.26 billion. The current account surplus in the quarter accounted for 16.6 per cent of gross domestic product.

The think tank also expected exports to shrink by 1.70 per cent this year, against previous contraction forecast of 1.20 per cent.

Maybank Kim Eng Securities’ economist Tim Leelahaphan maintains his view that the annualised growth rate would be 4 per cent in 2016.

“Markets were too pessimistic about Thailand’s growth for quite some time already. However, we maintain our above street view. What we will see this year is more stimulus to come and more infrastructure in the second half. We also see that exports could be better than the market expects this year… Looking forward, the military will continue to boost growth, helping a sector affected by the drought. Infrastructure projects will move forward,” he said.

Nalin Chutchotitham, HSBC’s economist for Thailand, did not share similar optimism. She noted that the first-quarter numbers showed that economic recovery remained uneven across sectors. Underlying growth remained relatively changed from the previous quarter, as reflected in the seasonally-adjusted sequential growth of 0.9 per cent in the first quarter against 0.8 per cent in the fourth quarter.

“Downside risks to GDP growth remain, especially from weak export demand. High household debt and tepid farm income growth also suggest that private consumption is unlikely to pick up significantly in the near term. Additionally, weak business sentiment and political uncertainty are likely to keep private investment growth in check,” she said.

In the first quarter, private consumption expanded by 2.3 per cent on year, slower than 2.6 per cent in the previous quarter. Meanwhile, public consumption accelerated to 8.0 per cent, from 4.8 per cent.