Third-quarter GDP growth for 2022 (Q3/2022) is 4.5% -- substantially higher than the expected 4%. The main driving factor is robust private consumption -- not tourism income -- which expanded 9% in real terms and 15.7% in nominal terms, compared to the same quarter last year. On the surface, this high growth phenomenon may look normal as most Asean countries have enjoyed similar benefits of low Covid infections and pent-up demand. For instance, Malaysia's private consumption also expanded 15.7% in the same third quarter.
This high consumption growth bothers me a lot. The question is, where do Thai consumers find money to finance their consumption? To be exact, Thai consumers spent 328 billion baht more in Q3/2022 compared to Q3/2021. Other economies financed their high demand for consumption after Covid subsided through left-over government support programmes, current account surpluses and domestic savings. Current account surpluses, aka external savings, provide the economy with extra cash to be spent when needed. Higher domestic savings, a result of savings during Covid days, is another source of money to spend on pent-up demand. Malaysia has all three factors, while Thailand has none.
