Economic Comment 22 Nov 2016

Please see disclaimer on last page 1

Thailand’s 3Q16 GDP

Bit of a slow down

► Thai economy grew 3.2% YoY in 3Q16, slowing from 2Q16 and

below the consensus and our forecast. GDP expanded 3.3% YoY

in 9M16.

► All GDP components slowed down QoQ or contracted YoY, except

for exports which showed better growth.

► The key for growth in 3Q16 was private consumption which

remained strong at 3.5% YoY growth.

► Aggregate investment growth slowed down to 1.4% YoY.

► Tourism continued to be robust with substantial tourist arrivals.

► Agricultural sector expanded for the first time in two years.

► Manufacturing sector, the largest sector, slowed down again.

► Hotels & restaurants, construction, commerce, transportation &

telecom, financial and utilities (combined 45% of GDP) showed

decent growth, despite some slowdown.

► Revise down our GDP growth forecast to 3.3% for this year and

3.5% for 2017 from 3.5% and 4.0%, respectively, in our previous

forecast.

The Office of the National Economic and Social Development Board (NESDB) reported that the Thai economy

expanded by 3.2% YoY and 0.6% QoQ in 3Q16, slowing down from growth of 3.5% YoY and 0.7% QoQ in

2Q16 (See Table 1). The numbers were below expectations. Reuters’ consensus surveys had called for the

Thai economy to expand by 3.4% YoY and 0.7% QoQ in 3Q16, and we had estimated 3.5% YoY and 0.8%

QoQ. All GDP components expanded at slower growth rates QoQ or even contracted YoY, except for exports

of goods which showed small growth of 0.4%. For 9M16 the Thai economy expanded by 3.3% YoY.

The NESDB forecast its GDP growth for this year at 3.2%, tilting slightly towards the lower end of its previous

forecast of 3.0-3.5%. It said the economy in 4Q16 could slightly soften due to the mourning period for the death

of King Rama 9, slower tourism and last year's high base effect. It predicted 2017 GDP to grow 3.0-4.0%. We

revise down our GDP growth forecast to 3.3% for this year and 3.5% for 2017 from 3.5% and 4.0%,

respectively, in our previous forecast.

Weight 2015 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

Private consumption 53.6 2.1 2.5 1.7 1.8 2.6 2.3 3.8 3.5

Public consumption 17.2 2.2 0.7 1.0 2.3 4.8 8.0 1.5 -5.8

Private investment 14.6 -2.0 3.7 -3.1 -10.1 1.9 2.1 0.2 -0.5

Public investment 7.0 29.8 36.6 23.2 21.9 41.2 13.3 11.9 6.3

Aggregate investment 21.6 4.7 10.3 2.6 -2.6 9.4 4.9 3.2 1.4

Exports of goods & services 67.2 0.2 1.2 1.5 1.7 -3.3 4.9 2.0 3.4

Goods -3.4 -2.5 -3.9 -1.8 -5.6 1.0 -0.9 0.4

Services 14.9 15.4 27.3 16.5 4.9 18.2 12.6 14.7

Imports of goods & services 54.7 -0.4 2.3 0.2 -2.6 -1.2 -4.7 -1.6 -1.3

Goods -0.6 3.9 -0.4 -3.3 -2.3 -7.1 2.7 3.9

Services 0.6 -3.2 2.3 0.1 3.4 3.9 -16.1 -19.9

Trade balance % of GDP 11.3 10.9 8.8 12.0 13.5 19.2 13.1 15.6

Current a/c balance % of GDP 8.9 8.1 6.2 7.6 10.4 16.7 8.1 10.7

GDP growth YoY 2.8 3.0 2.7 2.9 2.8 3.2 3.5 3.2

GDP growth QoQ 0.5 0.4 1.0 0.8 1.0 0.7 0.6

Source: NESDB and AWS estimates

Table 1: GDP growth: expenditure concept (% YoY)

Thailand Research Department

Mr. Warut Siwasariyanon (No.017923)

Tel: 02 680 5041

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Economic Comment 22 Nov 2016

2

Key for growth in 3Q16 was private consumption

Private consumption, which accounted for 53.6% of GDP, expanded at a slightly slower rate of

3.5% in 3Q16, from 3.8% in 2Q16. We still consider this growth as very strong. The slowdown was

attributed to spending on durable and non-durable goods that decelerated, in particular, new

vehicle and furniture purchases by households after several promotional campaigns ended in

2Q16. Farm equipment purchases were still strong, on still high farmers’ income from continued

increases in farm product volume sales as the weather has turned out to be even more favourable

to agricultural production, despite some negative price adjustments, particular in the case of rice.

Spending on services accelerated markedly for transportation, telecommunication, restaurants and

hotels.

In contrast, public consumption contracted 5.8% YoY on a decline in budget disbursements by

government agencies during the quarter. Government spending on goods and services in the

normal market system plunged 28.5% YoY.

Aggregate investment slowed down

Aggregate investment rose only 1.4% in 3Q16, decelerating from a 3.2% gain in 2Q16 as

government investment growth slowed down to 6.3% from robust 11.9% expansion in 2Q16 and

private investment contracted by 0.5% YoY versus 0.2% growth in 2Q16. Spending in construction

slowed down due to the seasonal impact of the rainy season. Private inventories, mainly contributed

by rice, jewelry, and wiring and wiring devices, dropped 0.5% YoY due to global economic

uncertainty.

Exports of goods & services saw better growth of 3.4%

Exports of goods and services rose by 3.4% YoY in 3Q16 whereas imports of goods and services

shrank 1.3%, accelerating from 1.6% contractions in 2Q16. The country’s external balance was

even better in 3Q16 than in 2Q16. In 3Q16 the country registered a trade surplus of Bt545.3bn, or

15.6% of GDP and a current account surplus of Bt373.9bn, or 10.7% of GDP. In 2Q16, the trade

surplus was Bt454.7bn, or 13.1% of GDP and the current account surplus was Bt281.1bn, or 8.1%

of GDP.

Exports of goods grew only 0.4% YoY but was better than the 0.9% contraction in 2Q16. Exports

of services, which were mainly revenues from tourism, surged 14.7% YoY in 3Q16, having

continued strong growth for more than eight consecutive quarters. The number of tourist arrivals to

Thailand has continued to be strong (see Table 4).

Agricultural sector expanded for the first time in two years

The agricultural sector expanded in 3Q16 for the first time after seven consecutive quarters of

contraction (see Table 2). The GDP of the agricultural sector grew by 0.9%, from a 1.2%

contraction in 2Q16. This was mainly due to higher production yields of major crops, namely rice,

cassava, oil palm, and vegetables. The export demand for shrimp continued to increase. Overall

agricultural prices rose 4.3%.

Weight 2015 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

Agricultural sector 5.8 -3.8 -4.6 -4.1 -5.5 -2.1 -1.4 -1.2 0.9

Non-agricultural sector 94.2 3.6 3.9 3.2 3.2 4.0 3.7 3.8 3.2

GDP growth YoY 2.8 3.0 2.7 2.9 2.8 3.2 3.5 3.2

GDP growth QoQ 0.5 0.4 1.0 0.8 1.0 0.7 0.6

Source: NESDB

Table 2: GDP growth: Agricultural sector versus Non-agricultural sector (% YoY)

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Economic Comment 22 Nov 2016

3

Non-agricultural sector slowed down again

The non-agricultural sector continued to expand satisfactorily although the rate of growth slowed

down to 3.2% in 3Q16 from 3.8% in 2Q16. The manufacturing sector, which is the largest

economic sector and non-agricultural sector and accounts for around 28% of the country’s GDP,

decelerated again to a 0.9% YoY growth from a 2.1% growth in 2Q16 (see Table 3). The main

reason was that the domestic demand decreased while export demand started to rise. Light

industries contracted with a slowdown in domestic demand for furniture while textile and wearing

apparel production dropped in response to declining exports. Raw material industries contracted,

particularly in the petrochemical industries, both from decreases in demand for exports and

downstream domestic demand. Capital and technology industries expanded at a slower rate in

3Q16 mainly in the auto industry which export demand slowed down.

Hotel & restaurants, construction, commerce, transportation & telecom, financial and utilities,

which together accounted for 45% of GDP, showed decent growth, despite some slowdown.

Again, the bright spots were the hotel & restaurants sector which registered very impressive

growth of 15.9% even better than in 2Q16, driven by continued strong tourism. The commerce

and transportation sectors both showed impressive growth. The construction sector, which is

supposed to benefit from the government’s infrastructure investment, faced the seasonal impact

of the rainy season as mentioned earlier.

Weight 2015 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

Agricultural sector 5.8 -3.8 -4.6 -4.1 -5.5 -2.1 -1.4 -1.2 0.9

Mining 2.5 1.3 0.1 -1.4 2.4 4.0 4.7 1.5 2.9

Manufacturing 27.9 0.9 2.2 -0.2 1.0 0.8 -0.2 2.1 0.9

Electricity, gas and water supply 3.8 4.1 3.7 2.8 4.8 5.2 7.7 7.2 6.1

Construction 3.2 15.8 19.6 12.5 9.4 23.9 11.2 7.8 5.0

Wholesales & retail trades 14.5 4.3 4.1 3.7 4.1 5.5 5.0 5.5 5.5

Hotels & restaurants 5.8 14.0 18.0 22.1 12.7 5.0 15.8 12.7 15.9

Transportation & logistic 10.3 7.4 8.1 9.7 6.7 5.2 5.6 4.4 6.4

Financial intermediation 7.2 7.1 8.0 7.7 5.9 6.8 4.3 4.6 4.4

Real estate & renting activities 8.3 3.8 4.5 2.2 3.1 5.4 3.3 2.8 1.8

Education 3.2 -2.8 -5.8 -4.0 -3.9 2.6 0.5 -1.6 -2.4

Healthcare & social work 1.7 1.9 -0.8 0.9 3.0 4.6 4.9 5.2 1.9

Community, social services 2.1 4.9 2.9 5.4 6.1 5.2 8.4 10.5 10.3

Source: NESDB

Table 3: GDP growth by economic sectors (% YoY)

2015 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

East Asia 19,909 4,849 4,988 5,098 4,974 5,798 5,397 5,799

Europe 5,631 1,931 939 1,072 1,690 2,095 1,039 1,202

Others 4,383 1,053 1,051 1,106 1,172 1,146 1,117 1,227

Total 29,923 7,833 6,978 7,276 7,836 9,039 7,553 8,228

YoY Growth (%) 20.6 22.9 36.9 24.4 4.7 15.4 8.2 13.1

Source: Ministry of Tourism and Sports

Table 4: Number of tourist arrivals ('000 persons)

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CG Report

4

Score Range Number of Logo Description

90 – 100

80 – 89

70 – 79

60 – 69

50 – 59

Below 50

No logo given

Excellent

Very Good

Good

Satisfactory

Pass

N/A

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2015.

Corporate Governance Report disclaimer

The disclosure of the survey result of the Thai Institute of Directors

Association (“IOD”) regarding corporate governance is made pursuant

to the policy of the Office of the Securities and Exchange Commission.

The survey of the IOD is based on the information of a company listed

on the Stock Exchange of Thailand and the Market for Alternative

Investment disclosed to the public and able to be accessed by a

general public investor. The result, therefore, is from the perspective of

a third party. It is not an evaluation of operation and is not based on

inside information.

The survey result is as of the date appearing in the Corporate

Governance Report of Thai Listed Companies. As a result, the survey

result may be changed after that date, Asia wealth Securities Company

Limited does not conform nor certify the accuracy of such survey result.

Please see disclaimer on last page

CG Report

5

ขอมล Anti-Corruption Progress Indicator ของบรษทจดทะเบยน

ระดบ 1ACD AEONTS AFC AIRA AJ ALUCON AMC AQUA ARIP AUCT BAT-3K BIG BJCBLISS BMCL BOL BRR BSBM CBG CCET CCN CGD CMR CPH CSC CSPCTW DCON DRACO DSGT DTCI E EMC ESSO FOCUS FSMART GIFT GLANDGRAND GUNKUL HFT HTECH IHL ILINK ITD JSP KDH KTIS KTP LEE LSTMAJOR MATCH MAX M-CHAI MDX MIDA ML MPIC NC NEP NNCL NWR OHTLPICO PK PL PPM PRAKIT PRECHA PRIN PSTC PYLON RAM RICH RS SANKOSAUCE SAWAD SAWANG SCN SEAFCO SF SHANG SIRI SMART SMM SOLAR SPACK SPGSPPT SPVI STA STAR SVH SVOA SWC TAPAC TC TCCC TCJ TCOAT THTKS TNH TNPC TPA TPAC TPOLY TRC TRUBB TSE TTA TTI TTL TTTMTWP TWZ U UMS UPA UPOIC UTP UVAN VARO VI VIBHA VIH VTEWG

ระดบ 22S ABICO AF AKP AMARIN AMATA AOT APCO AYUD BEAUTY BFIT BH BKDBLAND BTNC CCP CI CSR CSS EFORL EPCO FE FNS FVC GEL GLOBALHEMRAJ IEC IFS INET JUTHA KASET KCAR KKC KSL L&E LALIN LTX MMALEE MBK MBKET MEGA MK MPG MTLS NCH NCL NPP OCC OCEAN PBPCA PRINC QH ROCK RPC S&J SGP SIAM SIS SKR SMG SMIT SORKONSUSCO TAKUNI TEAM TF TIC TIP TIPCO TMC TMI TPP TRT TRU TRUETSC TSI TTW TVD TVO UKEM UNIQ UWC VNG WIIK WIN XO

ระดบ 3AABC ACAP ADVANC AEC AGE AH AIE AMANAH ANAN AP APCS APURE ASASIA ASIAN ASIMAR BIGC BROOK BTS BWG CEN CENTEL CFRESH CHARAN CHO CHOTICM CNT COL CPALL CPF CPI CPL DELTA DEMCO DIMET DNA DTAC EAECF EE EVER FPI GBX GC GFPT GLOW HMPRO HOTPOT ICC ICHI IFECINOX INSURE IRC JAS JTS JUBILE KC KTC KYE LHK LPN LRH MAKROMC MCOT MFC MFEC MINT MJD MONO MOONG NBC NDR NINE NMG NSINTV OGC PACE PCSGH PDI PG PHOL PLAT PPS PR PRANDA PREB PSQLT RATCH RML ROBINS ROJNA RWI SAMCO SCCC SCG SEAOIL SE-ED SENA SINGERSITHAI SMK SMPC SPALI SPC SPCG SPI SRICHA SSI STANLY SUPER SVI SYMCSYNEX SYNTEC TASCO TCMC TFI THAI THRE THREL TICON TKT TLUXE TNL TPCORPTMILL TMT TSTE TSTH TTCL TU TVI UOBKH UREKA VGI VNT WACOAL WHAZMICO

ระดบ 3BAAV AHC AI AIT AKR ARROW ASK BA BDMS BEC BECL BJCHI BUICGH CHG CHOW CIG CITY CK CKP COLOR CWT EARTH EASON EPG F&DFANCY FIRE FMT FORTH GENCO GL GOLD GPSC GRAMMY HYDRO IRCP IT JCTKCM KWC LH LIT LOXLEY MACO MANRIN MATI MODERN MSC NOBLE NOK NPKNUSA OISHI OTO PAF PAP PATO PF PJW PLANB PLE POLAR PRG PTLQ-CON QTC RCI S11 SALEE SAM SAMART SAMTEL SAPPE SC SCP SFP SIMSLP SMT SPA SPORT SSC SST STEC STPI SUC SUTHA T TAE TBSPTCC TFD TGCI TGPRO THANA THIP TIW TK TMW TNDT TOPP TPC TPCHTPIPL TSR TT TYCN UAC UBIS UEC UMI UP UPF UT UV VPOWAVE WINNER YUASA

ระดบ 4ASP BAFS BANPU BAY BBL BKI BLA CIMBT CNS CSL DCC DRT DTCEASTW ECL EGCO ERW FSS GCAP HANA HTC INTUCH IRPC IVL KBANK KCEKGI KKP KTB LANNA LHBANK MTI NKI PSL PTG PTTEP SABINA SCB SNCSNP SSF SSSC TCAP THCOM TISCO TIMB TMD TNITY TOG

ระดบ 5BCP CPN GYT PE PM PPP PT PTT PTTGC SAT SCC THANI TOP

ไมเปดเผยหรอไมมนโยบายA ACC AJD AQ BCH BGT BROCK BSM BTC CHUO CPR CRANE EICFER JMART JMT KAMART KBS KIAT LDC MBAX MCS METCO NEW NEWS NYTPAE PDG PERM PMTA POST RCL RICHY ROH S SIMAT TCB TR TSFTVT WORKหมายเหตระดบ 1 : มนโยบายระดบ 2 : ประกาศเจตนารมณระดบ 3 : มมาตรการปองกน ซงทง 2 กรณ ถอเปนผลการประเมนในระดบเดยวกน

3A : บรษทมการประกาศเจตนารมณเขารวมโครงการ CAC หรอภาค3B : บรษทมค ามน และนโยบายของบรษท แตมไดประกาศเจตนารมณเขารวมโครงการ CAC หรอภาค

ระดบ 4 : ไดรบการรบรองระดบ 5 : ขยายผลสผท เกยวของ

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