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Thailand’s economy showed positive results for the third quarter on Monday, growing faster than what economists had predicted and is expected to have a strong year in 2018.

According to data released by the National Economic and Social Development Board (NESDB), the country’s gross domestic product (GDP) rose 4.3 percent year on year, coming in ahead of economists’ median estimate of 3.8 percent.

This is its fastest annual growth pace ever since it recorded a 5.2 percent increase during the first quarter in 2013.

On a quarterly basis, Thailand’s economy expanded by 1 percent, also beating growth forecasts of 0.75 percent.

The country’s SET index was up by 0.2 percent to ฿1,714.38 on Monday, following the release of figures.

The 4.3 percent growth could also be suggesting that Thailand’s monetary policy is likely to remain loose to help its still-slow domestic demand.

The Bank of Thailand (BOT) has kept its benchmark interest rate unchanged at 1.5 percent since April 2015. The central bank is expected to discuss policy at its last meeting this year on December.   

Several economists presumed that there will be changes in the policy in 2018, given that inflation is at a moderate level.  

GDP Growth Driven by Export and Agricultural Sector

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NESDB stated that robust growth in the export sector was one of the main contributing factors for GDP’s expansion.

Exports of goods and services rose to 7.4 percent on a year to year basis, compared to 6 percent in the previous quarter.

Economist Tim Leelahaphan said that the broad-based rise in exports persisted, despite a strong baht, which has been getting support from healthy macroeconomic factors.

Leelahaphan added that the currency’s upbeat state could go on for the rest of this year and in 2018.

Thai baht gained 0.2 percent against the US dollar to 0.0305 on Monday.

Thailand’s imports however, grew to 6.7, falling behind from the past quarter’s 8.2 percent as imported goods went through a slowdown in the third quarter.  

The agricultural sector which expanded by 9.9 percent, was another major source for GDP’s growth, but it lost pace from 16.1 percent in the previous quarter.

Thailand’s Economic Outlook

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NESDB is expecting Thailand’s economy to likely grow by 3.9 for the whole year, while it sees a 3.6 percent to 4.6 percent increase in 2018 on account of a 5 percent expansion in exports.

The agency’s Secretary-General Porametee Vimolsiri believes that economic growth next year will accelerate from 2017, saying that they might hit the 4 percent level as a result of an improving global economy, government investment, as well as a clearer recovery of private investment.

Vimolsiri added that employment and revenue will see better progress as well.

Economist Krystal Tan stated that the uncertain political situation may pose a huge risk to the outlook, but given that is avoided, they expect a full-year GDP growth of 4 percent in 2018. This is fastest pace of expansion since 2012.

Before the figures were presented, they estimated a 3.5 percent growth next year.

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