The Thai economic recovery has continuedto broaden and gain momentum, reflecting an increase inexternal demand amid global growth and a recovery fromsevere drought. The economy grew by 3.3 percent in 2017Q1,exceeding market expectations, as farm incomes andmerchandise and tourism exports rose and fiscal stimuluspolicies continued. Merchandise exports recorded 6.6 percentgrowth, the highest growth observed in the last four years,due to both rising global commodity price and tradingpartner growth. Economic indicators suggest that the goodsexport upswing became increasingly broad-based and sustainedin 2017Q2. The agricultural sector expanded by 7.7 percentdue to rising agricultural prices and recovery from severedrought in 2015-2016. Domestic demand remained lackluster.Both private investment and private consumption growthremained sluggish. Private investment contracted by 1.1percent in 2017Q1, reflecting spare production capacity inthe manufacturing sector although certain subsectors showedlowered spare capacity due to increased external demand.Overall credit issuance remained subdued as lendingstandards tightened while loans to large corporates turnedpositive in 2017Q1 for the first time since 2015. Loans toSMEs and households continued their deceleration trends.Softening food prices resulted in a deceleration in headlineinflation. The broadening export upturn and publicinfrastructure plans are contributing to an improvement inThailand’s economic outlook. Economic growth is projected toreach 3.5 percent in 2017 and 3.6 percent in 2018, asinflation is expected to return gradually to the low end ofthe inflation target range (1.0-4.0 percent). Continuedagricultural recovery and strengthened household balancesheets will support private consumption growth while theexport upswing will eventually spur manufacturing activity,capital goods import and private investment. However, aself-sustained recovery will hinge rising domestic demandsupported by continued expansionary fiscal and monetarypolicies. Public infrastructure investments to connectlagging regions and upgrade rail through dual tracking cancrowd in private investment, raise economy-wide productivityand improve investor sentiment. One specific focus areawould be network slicing to ready broadband networks for theindustries of the future in key requirements: latency,throughput, capacity and availability. Broadbandinfrastructure in Thailand will face exploding demands ofdata and heterogeneous requirements of different industriese.g. automotive, healthcare, logistics, retail or utilities.The network requirements for a factory with automated andflexible production systems would differ from those of ahospital doing robotic surgeries, or from the requirementsof self-driving cars. To cater to these differentrequirements, networks will need to support differentrequirements for latency, throughput, capacity andavailability. This would require a paradigm shift towardsnetwork slicing which can meet such needs. The EuropeanCommission is supporting a coalition of network operators1and academic institutions to focus on network slicing for5G, and has provided $8.9 million in funding for the initiative.
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