Thailand's economy grew a stronger-than-expected 1.2 per cent in the third quarter from the previous three months, reinforcing expectations that the central bank will keep its policy interest rate on hold until 2013.
Third-quarter growth was slower than April-June's revised 2.8 per cent, as the weakening global economy hit exports and factory production. But the latest pace was higher than the 0.9 per cent quarterly gain forecast in a Reuters poll.
The Bank of Thailand's policy committee, which surprisingly cut rates in October, holds its last meeting of the year on Nov. 28.
We believe that policy rate will remain on an easing bias, although we do not expect the BOT to cut rate by another 25 basis points until the first half of 2013, said Usara Wilaipich, senior economist at Standard Chartered Bank in Bangkok.
The National Economic and Social Development Board (NESDB) on Monday also said that gross domestic product in the third quarter expanded 3.0 per cent from a year earlier, almost matching the 3.1 per cent forecast by the polled economists, and compared with revised annual growth of 4.4 percent in the second quarter.
Domestic factors were a boost for this quarter as consumption expanded well, particularly household expenditure as well as total investment, Arkhom Termpittayapaisith, NESDB secretary-general, told a news conference.
Overall investment rose 15.5 per cent in the third quarter from a year before while overall consumption was up 6.5 per cent, with household spending up 6 per cent year-on-year.
Activity in the first half of the year was buoyed to a large extent by spending on reconstruction and replacement equipment after devastating floods in late 2011, but much of that rebuilding has now been completed.
Exports fell 3 per cent in the third quarter from a year earlier as global demand for Asian goods deteriorated, the agency said.
Manufacturing slumped 10.2 per cent from a year before, even as factories restored more capacity after the floods. Industrial goods account for about 65 per cent of exports.
Like in many Southeast Asian nations, strong domestic demand and tourism have helped shore up Thailand's economy even as exports and industrial output slumped.