Thailand Adds To The Asian Recovery

Thailand continues to recover from recession. On a quarter to quarter basis the third  quarter Real Gross Domestic Product rose 1.35% compared with 2.27% in the second quarter, as shown in the first chart.  The smaller increase in the third quarter was due in part to a much greater increase in imports than in exports and an increase in the pace of inventory liquidation.  While exports increased by 46 billion baht from the second to the third quarter, imports rose by 48 billion bahts, reducing the favorable balance on trade in goods and service by 2 billion bahts.  The 17 billion baht decline in inventories in the third quarter was almost double the 9 billion baht decline in the second quarter.

The other components of GDP showed gains:  Private Consumption was up 1.7%, Government Consumption, 0.9% and Gross Fixed investment, 5.8%.  The statistical discrepancy was up almost 25%, but because of its small size, it has little impact on the rate of growth.

An increase in imports is frequently seen as the beginning of a recovery or expansion of activity in most economies and particularly in emerging economies.  They need more raw materials and machinery than they produce domestically to meet growing domestic and foreign demands.  The second chart shows Thailand's imports of Mineral Fuels and Lubricants, Chemicals and Machinery as an illustration of this type of import.

Both sets of data are found in Haver's EMERGEPR database.