Private consumption perked up 3.5 per cent year-on-year on the back of a 7.9-per-cent revival in vehicle purchases, while service exports jumped 14.7 per cent on the uptrend in foreign-tourist arrivals.
Year on year, merchandise exports showed growth of 0.4 per cent, but public-sector consumption in the quarter contracted 5.8 per cent on declines in expenses after strong state budget disbursements in the previous period, which saw a 1.5-per-cent rise, the EIC said.
Public investment expanded by 6.3 per cent, compared with 11.9 per cent in the second quarter, as fewer stimulus measures were in play.
Private investment shrank 0.5 per cent year on year, reflecting sluggish investment for manufacturing.
Construction of manufacturing plants fell 24.2 per cent, while investment in machinery dropped 0.5 per cent, reflecting still-weak private-sector confidence in the economy, the centre said.
Nalin Chutchotitham, an economist at HSBC’s Bangkok branch, said third-quarter GDP growth came in slightly below the market’s consensus forecast but above its expectation of 3.2 per cent year on year.
Gross domestic product grew 0.6 per cent quarter on quarter, a tad below second-quarter growth.
Exports of both goods and services contributed more to overall GDP growth in the third quarter, offsetting the lower contribution from domestic demand, which decelerated.
Private consumption and public investment remained key drivers of growth, in contrast to flattish private investment.
Growth appears to be on a steadier path now that the government has managed to get its infrastructure projects moving, although downside risks remain from global economic uncertainties and weakness in Thailand’s household income growth.
HSBC expects no more policy-rate cuts in the foreseeable future.
The NESDB reaffirmed its outlook for 2016 growth at 3.2 per cent, down from the prior 3.0-3.5 per cent, and expects 2017 growth to run at 3-4 per cent, supported by an improvement in exports, which HSBC projects at 2.4 per cent and continued growth of total consumption and public investment.
More public infrastructure projects have been approved and have progressed to the tendering process in recent months, especially for motorways, mass-transit systems and railways.
However, higher debt among households and small businesses is likely to remain a drag on domestic demand.
HSBC expects GDP growth to remain at a moderate pace in 2017 from the current forecast of 2.8 per cent before accelerating slightly in 2018.
With inflationary pressures limited, the Bank of Thailand will most probably maintain its policy interest rate at 1.5 per cent for the foreseeable future, it said.