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Thai Q2 growth seen slowing to 1% q-o-q as tourism, manufacturing decelerate: poll

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Thailand's economic growth in was expected to slow in the second quarter from January-March, a Reuters poll showed, as exports remained strong but manufacturing and tourism lost momentum.

[BANGKOK] Thailand's economic growth in was expected to slow in the second quarter from January-March, a Reuters poll showed, as exports remained strong but manufacturing and tourism lost momentum.

The median estimate from a poll 14 economists saw seasonally-adjusted growth of 1.0 per cent in April-June versus the first quarter. Respondents' estimates ranged from 0.7 per cent to 1.5 per cent.

Gross domestic product grew 2.0 per cent in the first quarter, which was the fastest since fourth-quarter 2012.

The poll's median forecast saw annual growth at 4.5 per cent in the June quarter, below the March quarter's 4.8 per cent.

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"GDP growth has already hit its peak and moderated in the second quarter, thanks to a slowdown in manufacturing activities as well as tourism," said Charnon Boonnuch, economist at Nomura in Singapore.

He said growth would slow further in the second half of the year as US-Chinese trade tensions posed a risk to Thai exports, while July's boat accident in which dozens of Chinese tourists were killed would reduce visitor numbers.

The tourism ministry expects the number of tourists from China, Thailand's biggest market, to fall by 669,000 to 5.15 million over July-December.

However, finance minister Apisak Tantivorawong told Reuters in an interview that second-quarter growth might be closer to the first quarter's pace, driven by stronger exports and increased investment.

Southeast Asia's second-largest economy has seen a pick-up in growth thanks to exports and tourism even as private consumption and investment have lagged, depressed by elevated household debt.

The poll's median forecast for full-year 2018 growth was 4.4 per cent after last year's 3.9 per cent, which was the fastest in five years.

The Bank of Thailand has left its policy interest rate unchanged at 1.50 per cent, near record lows, since April 2015. But the BOT noted a diminishing need for accommodative monetary policy at its last meeting.

Some analysts expect no policy change throughout 2018 while others predict a rate hike on continued growth and policy tightening in other countries.

Thailand's exports, a key growth driver, rose 12.3 per cent in April-June from a year earlier, while growth in tourism slowed to 9.1 per cent and manufacturing production growth slowed to 3.5 percent.

The National Economic and Social Development Board, which compiles GDP data, forecast GDP growth of 4.2-4.7 per cent this year, with exports up 8.9 per cent. It will publish new projections on Monday. 

REUTERS

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