Economic Update 17 Feb 2016

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Thailand Research Department

Mr. Warut Siwasariyanon (No.17923)

Tel: 02 680 5041

Thailand’s GDP

Solid growth

► The Thai economy grew 3.2% YoY and 0.9% QoQ in 1Q16, the highest in

12 quarters and beating consensus estimates.

► Export recovery and aggregate consumption were key growth drivers.

► Exports grew 5.1% YoY in 1Q16 while imports contracted 4.8%. Quarterly

current account surplus hit another record high.

► Agricultural sector continued to squeeze, but with less contraction. Non-

agricultural sector kept on expanding.

► Manufacturing sector, which is the largest sector, showed a slight 0.3%

contraction.

► Hotels & restaurants, construction, commerce, transportation &

communication, financial, real estate and utilities (combined 49% of GDP)

showed decent growth.

► We maintain our GDP growth forecast at 3.5% for this year and 4.0% for

2017.

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

that the Thai economy expanded by 3.2% YoY and 0.9% QoQ in 1Q16, the highest in 12

quarters and up from 2.8% YoY and 0.8% QoQ growth in 4Q15. (See Table 1). The

numbers beat market expectations, but were in line with our forecasts. Bloomberg’s and

Reuters’ consensus surveys had called for the Thai economy to expand by 2.8% YoY and

0.6% QoQ in 1Q16. The NESDB revised its GDP growth forecast for this year to 3.0%-

3.5% from 2.8%-3.8% in its previous forecast. We maintain our GDP growth forecast at

3.5% for this year and 4.0% for 2017.

Export recovery and aggregate consumption as key growth driver in 1Q16

A recovery in exports and a slight acceleration in aggregate consumption and private

investment were key to the stronger growth in 1Q16 than in 4Q15 although government

investment decelerated QoQ.

Exports of merchandise & services expanded 5.1% in 1Q16 while imports of merchandise

& services contracted by 4.8%. As a result, current account surplus hit a record high of

Bt585.1bn, or 16.6% of GDP, surging 112.4% YoY from Bt275.5bn, or 8.1% of GDP, in

1Q15.

Aggregate consumption, which accounts for the largest portion of GDP at 62%, grew by

2.0% YoY in 2Q16, accelerating from 1.8% growth in 4Q15. Although household

consumption growth slowed to 2.3% from 2.6% in 4Q15, government consumption growth

accelerated to 8.0% from 4.8% in 4Q15. Household consumption slowed partly due to the

expiry of the government’s tax incentive for domestic tourism in 4Q15 and car buyers haste

to buy passenger cars prior to the end of 2015 before a new excise tax based on carbon-

dioxide emission went into effect.

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Economic Update 17 May 2016

Aggregate investment, which accounts for 29% of GDP, rose 4.6% YoY in 1Q16,

slowing from an increase of 9.4% in 4Q15. The was because while private investment

growth accelerated to 2.1% in 1Q16, from 1.9% growth in 4Q15, government investment

growth decelerated markedly to 12.4% in 1Q16, from 41.2% in 4Q15.

Agricultural sector continue to contract while non-agricultural expanded strongly

The agricultural sector contracted 1.5% in 1Q16, improving from a 2.1% contraction in

4Q15 (see Table 2). This was mainly because of a recovery in fishery production after an

outbreak of EMS (Early Mortality Syndrome) in shrimp aquaculture, which has impacted

Asia over the last three years, seems to have come to an end since 3Q15. Meanwhile,

livestock production kept growing satisfactorily. Only yields of major crops, namely paddy,

sugar, cassava, maize and oil palm, continued to decline as a result of the prevailing

drought across the country. The prices of major crops also slumped in 1Q16. However,

with the prolonged drought, we expect the prices of major crops to rise from 2Q16 due to

scarcity.

In contrast, the non-agricultural sector expanded satisfactorily with 3.7% growth in 1Q16,

despite slowing from 4.0% growth in 4Q15. The manufacturing sector, which is the

largest sector and accounts for around 28.1% of the country’s GDP, contracted 0.3% in

1Q16, slowing from 0.8% growth in 4Q15. This was mainly the consequence of a

contraction in the garment industry, a slowdown in auto production and the annual

maintenance plant shutdowns of major refineries. The garment industry continued to

suffer from cost competitive disadvantages compared with neighboring competitors who

have much lower labor costs than the Thai entrepreneurs. Meanwhile, auto production

slowed in reaction to the drop in car orders resulting from the new excise tax based on

carbon-dioxide emission that went into effect at the beginning of the year.

Hotels & restaurants, construction, commerce, transportation & communication,

financial and real estate and utilities, which together account for 49% of GDP, showed

very decent growth (see Table 3). The bright spots were the hotels & restaurants sector,

which registered very impressive growth of 15.8% driven by continued strong tourism,

Weight 2014 2015 1Q15 2Q15 3Q15 4Q15 1Q16

Private consumption 52.0 0.6 2.1 2.5 1.7 1.8 2.6 2.3

Public consumption 10.0 2.1 2.2 0.7 1.0 2.3 4.8 8.0

Private investment 17.0 -1.0 -2.0 3.7 -3.1 -10.1 1.9 2.1

Public investment 12.0 -7.3 29.8 36.6 23.2 21.9 41.2 12.4

Aggregate investment -2.4 4.7 10.3 2.6 -2.6 9.4 4.7

Exports of goods & services 67.0 0.2 0.1 1.2 1.5 1.7 -3.3 5.1

Imports of goods & services 58.0 -5.3 -0.4 2.3 0.2 -2.6 -1.2 -4.8

Trade balance % of GDP 6.6 11.3 10.9 8.8 12.0 13.5 19.4

Current a/c balance % of GDP 3.8 8.9 8.1 6.2 7.6 10.4 16.6

GDP growth YoY 0.8 2.8 3.0 2.7 2.9 2.8 3.2

GDP growth QoQ 0.5 0.4 1.0 0.8 0.9

Source: NESDB

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

Weight 2014 2015 1Q15 2Q15 3Q15 4Q15 1Q16

Agricultural sector 11.4 0.7 -3.8 -4.6 -4.1 -5.5 -2.1 -1.5

Non-agricultural sector 88.6 0.8 3.6 3.9 3.2 3.2 4.0 3.7

GDP growth YoY 0.8 2.8 3.0 2.7 2.9 2.8 3.2

GDP growth QoQ 0.5 0.4 1.0 0.8 0.9

Source: NESDB

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

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Economic Update 17 May 2016

and the construction sector which showed solid growth of 11.2%, bolstered by the

government’s infrastructure investment push.

Weight 2014 2015 1Q15 2Q15 3Q15 4Q15 1Q16

Agricultural sector 11.4 0.7 -3.8 -4.6 -4.1 -5.5 -2.1 -1.5

Mining 3.3 -1.6 1.3 0.1 -1.4 2.4 4.0 1.8

Manufacturing 28.1 -0.2 0.9 2.2 -0.2 1.0 0.8 -0.3

Electricity, gas and water supply 3.0 2.7 4.1 3.7 2.8 4.8 5.2 7.3

Construction 2.9 -3.7 15.8 19.6 12.5 9.4 23.9 11.2

Wholesales & retail trades 15.8 -0.5 4.3 4.1 3.7 4.1 5.5 5.1

Hotels & restaurants 4.5 2.4 14.0 18.0 22.1 12.7 5.0 15.8

Transportation & logistic 7.6 3.4 7.4 8.1 9.7 6.7 5.2 5.6

Financial intermediation 8.0 6.8 7.1 8.0 7.7 5.9 6.8 4.5

Real estate & renting activities 7.1 0.5 3.8 4.5 2.2 3.1 5.4 3.0

Education 4.5 0.9 -2.8 -5.8 -4.0 -3.9 2.6 0.1

Healthcare & social work 1.7 2.7 1.9 -0.8 0.9 3.0 4.6 3.3

Community, social services 1.8 -0.1 4.9 2.9 5.4 6.1 5.2 7.9

Source: NESDB

Table3: GDP growth by economic sectors (% YoY)

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CG Rating

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.

ADVANC BAFS BCP BIGC BTS CK CPN DRT DTAC DTC EASTW EGCO GRAMMYHANA HMPRO INTUCH IRPC IVL KBANK KCE KKP KTB LHBANK LPN MCOT MINTMONO NKI PHOL PPS PS PSL PTT PTTEP PTTGC QTC RATCH ROBINS SAMARTSAMTEL SAT SC SCB SCC SE-ED SIM SNC SPALI THCOM TISCO TKT TMBTOP VGI WACOAL

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2S AEC AEONTS AF AH AIRA AIT AJ AKR AMANAH AMARIN AP APCOAQUA AS ASIA AUCT AYUD BA BEAUTY BEC BFIT BH BIG BJC BJCHIBKD BTNC CBG CGD CHG CHOW CI CITY CKP CNS CPALL CPL CSCCSP CSS CTW DNA EARTH EASON ECL EFORL ESSO FE FIRE FOCUS FORTHFPI FSMART FSS FVC GCAP GENCO GL GLAND GLOW GOLD GYT HTC HTECHIEC IFEC IFS IHL IRCP ITD JSP JTS JUBILE KASET KBS KCAR KGIKKC KTIS KWC KYE L&E LALIN LHK LIT LIVE LST M MAJOR MAKROMATCH MATI MBKET M-CHAI MFC MILL MJD MK MODERN MOONG MPG MSC MTIMTLS NC NOK NUSA NWR NYT OCEAN PACE PATO PB PCA PCSGH PDGPF PICO PL PLANB PLAT PPM PRG PRIN PSTC PTL PYLON QLT RCIRCL RICHY RML RPC S SALEE SAPPE SAWAD SCCC SCN SCP SEAOIL SIRISKR SMG SOLAR SORKON SPA SPC SPCG SPPT SPVI SRICHA SSC STANLY STPISUC SUSCO SUTHA SYNEX TAE TAKUNI TCC TCCC TCJ TEAM TFD TFI TICTIW TLUXE TMC TMD TOPP TPCH TPIPL TRT TSE TSR UMI UP UPFUPOIC UREKA UWC VIBHA VIH VPO WHA WIN XO

Source: Thai Institute of Directors (IOD)

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CG Rating

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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