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By Vithoon Amorn
BANGKOK, June 28 (Reuters) - The Thai economy powered ahead for the third straight month in May, boosted by strong industrial production and surging consumer spending, monthly data from the Bank of Thailand (BOT) showed on Friday.
Rising consumer spending was reflected by the year-on-year growth in bank credit posted for the first time in two years.
The manufacturing production index (MPI) surged a stronger-than-expected 8.4 percent year-on-year in May, compared with 9.0 percent in April. Analysts had expected a rise of around 7.8 percent in May.
"This is quite a clearly bullish sign which would reflect well on second-quarter gross domestic product, helping it to grow faster than in the first quarter," said analyst Nujcharin Kasemsukworarat at SCB Securities.
The central bank said total baht loans extended by Thai banks, excluding offshore lending, were up 0.9 percent year-on-year in May, after two years of sustained contraction.
Central bank economist Atchana Waiquamdee told a news conference Thailand's trade performance was also very encouraging. Exports which posted a year-on-year gain for the second month in a row after nearly a year of contraction.
"The economy looked much better in May in whatever terms you look at it, whether in exports or the current account, which performed better than the previous month," Atchana said.
"Nothing looked better than exports, after several months of concern that they had dipped below $5 billion per month. For May, they rose to $5.7 billion."
The BOT said May exports, led by electronic products, surged 4.3 percent year-on-year after 1.1 percent growth in April.
MARKETS GAIN
The baht strengthened against the dollar on Friday, reaching around 41.50 to the dollar in late trade. Stocks ended up 1.6 percent, with small-cap packaging stocks surging on investor hopes they would benefit from Thailand's consumer boom.
Nujcharin of SCB said the May export growth was more remarkable given the fact that the depressed global economy had curbed the prices of Thai products.
"Exports actually rose about 18 percent year-on-year in volume in May but prices fell 11 percent," she said.
Isara Ordeedolchest of TISCO Securities shared the optimism, saying economic recovery was confirmed by rising capacity utilisation. The BOT said average industrial capacity utilisation rose to 59.1 percent in May from 55.6 percent in April.
"It is a good sign that both manufacturing production and capacity utilisation moved in the same direction in the same month. We have seen improving data in almost every sector in May," the analyst said.
Although the year-on-year MPI rise in May was slower than in April, it was still markedly higher than the 4.2 percent year-on-year growth in manufacturing in the first quarter, when the overall economy expanded 3.9 percent.
Evidence of an economic pick-up has also come from national car industry figures for May, which showed domestic auto sales, a key indicator of domestic spending, rose 15.9 percent year-on-year.
Isara of TISCO said May's trade surplus of $518 million was partly helped by a stronger baht which reduced the cost of Thai imports. The central bank said May imports fell 2.8 percent year-on-year after a 3.8 percent rise in April.