Thailand economy grows at slowest pace since 2014

21-Aug-2019 Intellasia | MarketWatch | 6:02 AM Print This Post

Thailand’s economy lost further momentum in the second quarter, growing at its slowest pace in nearly five years as the US-China trade war continued to weigh on its exports.

Gross domestic product expanded 2.3 percent in the second quarter from a year earlier, slowing from the 2.8 percent growth in the previous quarter, the National Economic and Social Development Board, the government’s economic-planning arm, said Monday. The growth matched the median 2.3 percent forecast of nine economists polled by The Wall Street Journal.

Second quarter growth was the slowest since the 1.1 percent growth recorded in the third quarter of 2014.

Exports of goods and services contracted 6.1 percent, maintaining the same pace of decline from the previous quarter, the data showed.

The agriculture sector also contracted 1.1 percent, compared with a revised 1.7 percent growth in the first quarter.

However, domestic demand softened as private consumption which accounts for nearly half of the Thai economy rose 4.4 percent, compared with a revised 4.9 percent gain in the first quarter.

Government spending rose 1.1 percent, slowing from the revised 3.4 percent increase in the first quarter, while public investment gained 1.4 percent after declining in the previous quarter. Private investment rose 2.2 percent after gaining 4.4 percent in the previous quarter.

On a seasonally adjusted quarterly basis, the economy grew 0.6 percent versus economists’ forecast for a 0.7 percent growth.

For 2019, the government body now expects the economy to grow 2.7 percent-3.2 percent from 3.3 percent-3.8 percent projected earlier. It expects exports to fall by 1.2 percent on year in 2019.

Weak global demand and a downturn in the tourism sector are likely to remain key drags on the economy over the coming quarters, Capital Economics said in a note.

“Exports are also likely to struggle, if as we expect, global growth continues to slow and the trade war between China and the US escalates further,” it said.

Write to Saurabh Chaturvedi at [email protected]


Category: Thailand

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