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Thailand trims outlook as Q3 GDP slower than expected
[BANGKOK] Thailand's economy grew much less than expected in the July-September quarter as exports contracted, forcing the authorities to again cut the country's growth forecast for the year.
The weak outlook has raised new doubts the junta can quickly turn the economy around even after pledging to roll out infrastructure spending and other measures to boost consumption.
Southeast Asia's second-largest economy grew 1.1 per cent in the third quarter on a seasonally-adjusted basis from the prior three months, and 0.6 per cent from a year earlier, the state planning agency said on Monday.
A Reuters poll of economists had forecast quarterly growth of 1.8 per cent in July-September, and annual growth of 1.0 per cent.
The army seized power on May 22 in a bid to end the crisis and kick-start the sputtering economy, but progress has been limited so far.
The economy suffered virtual paralysis in policy-making before the army took over. Badly hit sectors such as tourism are recovering only slowly.
Economists say there is a greater possibility of looser policy in the months ahead. "The relatively soft momentum in the Q3 GDP report will add further weight to the argument that Bank of Thailand should ease again," said Benjamin Shatil, economist with JP Morgan in Singapore.
"However, it is not clear to us that another 25 bp cut will have much of an effect in terms of stimulating activity, and we continue to look for government spending to support growth momentum into 2015, alongside a modest turn up in exports".
The central bank next reviews its policy rate on Dec 17 after keeping it steady at 2 per cent since March.
The National Economic and Social Development Board (NESDB) on Monday trimmed its 2014 growth forecast again to 1.0 per cent from 1.5-2.0 per cent. That would be the weakest growth since 2011, when devastating flooding cut growth to 0.1 per cent.
But the agency revised up growth in April-June from the previous three months to 1.1 per cent from 0.9 per cent. The economy avoided a technical recession but the pace of recovery has been slow. In 2013, the economy expanded 2.9 per cent.