Thailand's economic growth accelerated in the first quarter as the first elected government since a coup in 2006 took office, underpinning a rebound in consumer confidence and spending.
Gross domestic product in Southeast Asia's second-biggest economy expanded 6 percent in the three months to March 31 from a year earlier, the government said today in Bangkok. That was faster than the 5.7 percent in the fourth quarter.
Prime Minister Samak Sundaravej's government came to power in February, pledging to spur economic growth by spending on trains and buses traffic clogged Bangkok and on irrigation to boost farm production in rural areas. Templeton Asset Management Ltd.'s Mark Mobius said increased government spending this year will buoy Thailand's economy and boost stocks.
"We are starting to see accelerated investment and consumption,'' Ampon Kittiampon, secretary general of the government's National Economic and Social Development Board, said today. "The government's economic stimulus measures are taking effect.''
The quarterly expansion from last year matched the median estimate of 15 economists in a Bloomberg survey.
Consumption Climbs
Private consumption rose 2.6 percent from a year earlier, after gaining a revised 1.8 percent in the fourth quarter. Consumer confidence started rising in November from a five-year low amid anticipation that a democratically elected government would pursue policies more designed to promote growth than those of the military junta it replaced.
Total investment in the first quarter rose 5.4 percent from a year earlier, accelerating from 4 percent in the previous three months, today's report showed.
The baht gained about 7 percent against the dollar in the first three months of this year and Thailand's SET Index of stocks fell 4.8 percent.
"The new government has policies which are very positive toward businesses,'' Mobius, who oversees about $47 billion of emerging-market equities at Templeton in Singapore, said in an interview on May 24 in Bangkok.
GDP expanded 1.4 percent in the first quarter from the previous three months, when it grew a revised 1.7 percent, seasonally adjusted.
Manufacturing expanded 9.7 percent following a revised 8 percent pace in the previous three months. Private construction expanded 0.4 percent after contracting 8.5 percent in the fourth quarter.
Boosting Spending
Finance Minister Surapong Suebwonglee said May 20 that the government will increase spending to counter cooling economic growth as rising oil prices spur inflation and constrain consumer spending. Consumer prices gained 6.2 percent in April from a year earlier, the fastest pace since 2005.
"Higher fuel prices will increase inflation,'' said Mobius. "That in turn will dampen growth and consumption.''
The government plans to spend 1.84 trillion baht ($57 billion) in its fiscal year starting Oct. 1, a 12 percent increase from the forecast 1.64 trillion baht expenditure this year, it said on May 20. The spending will help the government meet its target of expanding the economy by 6 percent this year from 4.8 percent in 2007, Surapong said.
Surging Imports
Imports grew 34.5 percent in the first quarter, more than double the prior three months. Overseas purchases will surge 25.5 percent this year, compared with 9.6 percent in 2007 the central bank forecasts.
Exports, which make up 70 percent of the economy, slowed to 21 percent in the first quarter from 24 percent in the previous three months, according the Bank of Thailand. Still, soaring rice prices, which breached $1,000 a metric ton for the first time this month, helped buoy the value of shipments to a record in March.
"Thailand is a very vibrant exporter of agricultural commodities and manufacturing products,'' Mobius said at a Thai stock market conference in Bangkok on May 24. "This is another reason why we want to invest in Thailand.''
Gross domestic product in Southeast Asia's second-biggest economy expanded 6 percent in the three months to March 31 from a year earlier, the government said today in Bangkok. That was faster than the 5.7 percent in the fourth quarter.
Prime Minister Samak Sundaravej's government came to power in February, pledging to spur economic growth by spending on trains and buses traffic clogged Bangkok and on irrigation to boost farm production in rural areas. Templeton Asset Management Ltd.'s Mark Mobius said increased government spending this year will buoy Thailand's economy and boost stocks.
"We are starting to see accelerated investment and consumption,'' Ampon Kittiampon, secretary general of the government's National Economic and Social Development Board, said today. "The government's economic stimulus measures are taking effect.''
The quarterly expansion from last year matched the median estimate of 15 economists in a Bloomberg survey.
Consumption Climbs
Private consumption rose 2.6 percent from a year earlier, after gaining a revised 1.8 percent in the fourth quarter. Consumer confidence started rising in November from a five-year low amid anticipation that a democratically elected government would pursue policies more designed to promote growth than those of the military junta it replaced.
Total investment in the first quarter rose 5.4 percent from a year earlier, accelerating from 4 percent in the previous three months, today's report showed.
The baht gained about 7 percent against the dollar in the first three months of this year and Thailand's SET Index of stocks fell 4.8 percent.
"The new government has policies which are very positive toward businesses,'' Mobius, who oversees about $47 billion of emerging-market equities at Templeton in Singapore, said in an interview on May 24 in Bangkok.
GDP expanded 1.4 percent in the first quarter from the previous three months, when it grew a revised 1.7 percent, seasonally adjusted.
Manufacturing expanded 9.7 percent following a revised 8 percent pace in the previous three months. Private construction expanded 0.4 percent after contracting 8.5 percent in the fourth quarter.
Boosting Spending
Finance Minister Surapong Suebwonglee said May 20 that the government will increase spending to counter cooling economic growth as rising oil prices spur inflation and constrain consumer spending. Consumer prices gained 6.2 percent in April from a year earlier, the fastest pace since 2005.
"Higher fuel prices will increase inflation,'' said Mobius. "That in turn will dampen growth and consumption.''
The government plans to spend 1.84 trillion baht ($57 billion) in its fiscal year starting Oct. 1, a 12 percent increase from the forecast 1.64 trillion baht expenditure this year, it said on May 20. The spending will help the government meet its target of expanding the economy by 6 percent this year from 4.8 percent in 2007, Surapong said.
Surging Imports
Imports grew 34.5 percent in the first quarter, more than double the prior three months. Overseas purchases will surge 25.5 percent this year, compared with 9.6 percent in 2007 the central bank forecasts.
Exports, which make up 70 percent of the economy, slowed to 21 percent in the first quarter from 24 percent in the previous three months, according the Bank of Thailand. Still, soaring rice prices, which breached $1,000 a metric ton for the first time this month, helped buoy the value of shipments to a record in March.
"Thailand is a very vibrant exporter of agricultural commodities and manufacturing products,'' Mobius said at a Thai stock market conference in Bangkok on May 24. "This is another reason why we want to invest in Thailand.''
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