Thai Q2 GDP growth seen cooling on weaker private sector activity

[BANGKOK] Thailand's economic growth probably cooled slightly in April-June from the prior quarter, a Reuters poll showed, as private investment and consumption slowed and exports fell, offsetting some of the lift from state spending and tourism.

The military seized power in May 2014 to end prolonged political unrest, but has struggled to revive Southeast Asia's second-largest economy, with exports and domestic demand still weak.

That puts the onus on government spending and infrastructure projects as growth drivers.

In a poll of 19 economists, the median for quarterly growth in April-June was a seasonally-adjusted 0.5 per cent, down from the first quarter's pace of 0.9 per cent.

On an annual basis, growth was forecast at 3.2 per cent in the latest quarter, the same as in the January-March period, which was the fastest annual rate in three years.

Both the central bank and the finance ministry have predicted higher growth in the second quarter than the first.

The poll put full-year 2016 growth at 3.0 per cent, unchanged from the previous Reuters poll in May.

The economy expanded 2.8 per cent last year, up from 0.8 per cent in 2014 when political turmoil brought Thailand to the brink of recession.

Public sector spending will continue to support the economy this year as exports, worth about two-thirds of Thailand's GDP, are expected to contract for the fourth year running due to tepid global demand.

REUTERS