will steadily translate into real investment
- Pent-up investment applications for Bol privileges worth a combined THB 1.8tn since 2014 will steadily translate into real investment
Positive signs for the consumption outlook
Growth in household debt has decelerated
Consumption has gradually recovered
Export sector to continue to underperform
Export growth %,in USD terms.
Tourism sector should continue to support growth
Rising foreign tourist arrivals
2014 2015 2016E
Foreign tourist arrivals (million persons) 24.8 29.9 33.5
(%growth) -6.7 20.5 12.0
Foreign tourism revenues (THB tn) 1.15 1.43 1.72
(%growth) -4.9 25.0 20.4
Growing consumption by non-residents (% of domestic consumption)
Real policy rate likely to drop further as inflation increases
1-day policy repo rate adjusted for inflation
Key takeaways
- Thailand's economic structure is changing towards a service-based economy
- Further re-positioning business strategy is needed to align with Thailand's new economy
- We expect GDP growth to pick up further in 2017; backed by
o Notably progress in public transportation projects
o Strong tourism receipts
o Improving private investment and consumption
- We expect for a mild rate-hiking trajectory, with one 25bps hike in Q4-2017