Thailand: Cautious outlook for 2022 – UOB

Economist at UOB Group Barnabas Gan assesses the outlook for the Thai economy in the current year.

Key Takeaways

“GDP expanded 1.9% y/y (+1.8% q/q sa) in 4Q21, surprising market estimates for a milder growth of 0.8% y/y (+1.5% q/q sa). The latest data came on the heels of a revised 0.2% y/y contraction in 3Q21. Accounting for the latest print, Thailand’s economy grew 1.6% for the whole of 2021.”

“Government expenditure (+8.1% y/y) was the key driver for growth, while private consumption (+0.3% y/y) and gross fixed capital formation (GFCF, -0.2% y/y) disappointed. Meanwhile, trade surplus narrowed to THB14.4bn in 4Q21 (from THB57.6bn in 3Q21) as imports surged 16.2% y/y.”

“While we acknowledge that Thailand’s GDP has indeed surpassed expectations, we remain cautious over its growth momentum in 2022.”

“We maintain our 2022 GDP growth outlook at 3.5%. This is against official range outlook of between 3.5% - 4.5%. Officials have also upgraded their 2022 inflation outlook to 1.5% - 2.5%, from 0.9% -1.9%.”