A combination of strong domestic consumption, a boost in government expenditure and higher rates of investment in the manufacturing sector – after last year’s severe flooding – has led to Thailand’s economy growing by a rate of 4.2% for the second quarter of 2012.
Strong domestic consumption and investment have offset falls in the country’s exports. “Growth in the second quarter has been driven by a combination of strong domestic consumption and investment in the public and private sectors,” according to Nuchjarin Panarode, an economist at Nomura.
“If you decompose the growth of 4.2% into domestic and external factors, net exports contracted by 4.2 % but the domestic sector expanded 8.6%, where 5.7% is from domestic consumption and investment, and 2.8% is from the inventory increase,” she says.
This article was originally published by Euromoney Country Risk.