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Thailand 2016 growth up but below junta target
[BANGKOK] Thailand's economy grew 3.2 per cent in 2016, a slight increase on the previous year but below the junta's target as the generals struggle to revive what was once one of the region's strongest economies.
After two decades of roaring growth that saw the middle class boom, the nation has seen its financial fortunes stutter in recent years.
Political instability, including two army coups in a decade, coupled with high household debt and falling export competitiveness has dulled Thailand Inc.
If growth does not pick up the military, which seized power in 2014 vowing to kickstart the economy, risks losing the support of sections of the middle class and business community.
Junta chief Prayut Chanocha says Thailand will be a developed country by 2036. Nearly three years into his coup the results are mixed.
Figures released by the National Economic and Social Development Board on Monday showed the economy expanded by 3.2 per cent last year, up from 2.9 per cent in 2015.
The junta had previously set a goal of 3.7 per cent growth for the year.
Fourth-quarter annualised growth was three per cent, the slowest quarterly rate growth in a year.
The period coincided with the October death of widely revered King Bhumibol Adulyadej, who had reigned for seven decades.
His passing plunged the country into grief and an official mourning period that is ongoing.
"(Consumer) spending in first two months of last quarter was sluggish after the late king passed away but it bounced back in December," the board's secretary general Porametee Vimolsiri told reporters.
Much of the growth in junta-era Thailand now comes from tourism and state spending on large projects, many of which were delayed during the recent years of political chaos.
Critics say that kind of growth mainly benefits Bangkok, which already accounts for a hugely disproportionate share of the economy.
Analysts have mixed views on the country's longer-term economic prospects.
"A combination of lacklustre external demand, high household debt and continued political uncertainty will keep growth subdued in the quarters ahead," Capital Economics regional analyst Krystal Tan said in a note to clients.
She said the export sector, once a mainstay of the economy, "will continue to be held back by lacklustre external demand as well as waning export competitiveness".
The World Bank estimates East Asia's regional growth for 2016 was around 6.3 per cent and says Thailand could grow between 4-5 per cent a year if the economy is managed properly.