- Looking at the expenditure approach, the slowdown in the rate of growth was driven mainly by the contraction in merchandise exports.
- External demand softened. Merchandise exports in real terms contracted -5.4%YOY, down from 0.8%%YOY expansion in the previous quarter. Dragging exports were the slowdown in the global economy and the impact from the ongoing US-China trade war. Meanwhile, merchandise imports in real terms also contracted -2.6%YOY, down from 4.5%YOY growth in the previous quarter. This was in parts due to the decline in imports of raw material and intermediate goods used in the production of exports. Export of services, or tourism, also contracted -3.6%YOY, down from zero growth (0.0%YOY) in the previous quarter. This followed the decline in tourism income, despite 1.8%YOY growth in the number of foreign tourists in Q1/2019, suggesting that average spending per head of foreign tourists had declined compared to the same period last year.
- Private consumption posted a robust 4.6%YOY growth. This quarter saw an impressive 8.6%YOY growth in durable goods, especially auto sales that expanded 10.5%YOY. Similarly, non-durable goods expanded persistently at 3.6%YOY, supported partly by financial assistance for low-income individuals via the government welfare card, especially in the form of monthly expense allowance.
- Private investment grew at a slower pace than in the previous quarter. It expanded 4.4%YOY, compared to 5.5%YOY in the previous quarter. The main driver was investment in machineries and equipment, which grew 5.1%YOY, especially in the auto and transport categories boosted by the rise in new car registrations, such as taxis (passenger transport cars with up to 7 seats), buses, chartered buses, and personal vehicles.
- Public consumption grew 3.3%YOY, on the back of 5.6%YOY expansion in government puchases of goods and services, as well as 5.0% expansion in in-kind social benefits.
- Public investment declined slightly. It contracted -0.1%YOY, close to the previous quarter’s figure. The decline in public investment was led mainly by the -11.7%YOY contraction in investment in machineries and equipment, as Thai Airways did not import any aircrafts in Q1/2019. Nevertheless, investment in constructions grew 4.1%YOY, an improvement from 2.1%YOY in the previous quarter.
- The change in inventories also provided support for growth. Investories rose for computers and equipment, engines and turbines manufacturing, watches manufacturing, sugar, and rice.
- Considering the production approach, GDP growth slowdown in the first quarter was due mainly to softer growth in manufacturing of industrial products. The growth in manufacturing of industrial products fell to 0.6%YOY from 3.5%YOY in the previous quarter, following the contraction in exports of industrial products. Meanwhile, the agricultural sector expanded slightly by 0.9%YOY, which was already an improvement from 0.7%YOY growth in the previous quarter. The service sector saw softer growth in nearly all categories, such as hotels and restaurants, and transportation, whose growth slowed to 4.9%YOY and 3.4%YOY, respectively. This was a result of slower growth in the number of tourists. Similarly, the constructions sector expanded at a slower pace of 3.0%YOY, following softer growth in private constructions.