Thai Q3 GDP growth disappoints, missing forecasts amid weak exports
THAILAND’S economy grew much slower-than-expected in the third quarter, weighed down by weak exports and government spending, the state planning agency said on Monday (Nov 20), while predicting stronger growth next year.
Gross domestic product (GDP) expanded 1.5 per cent in the July-September quarter from a year earlier, the National Economic and Social Development Council (NESDC) said, down from the 2.4 per cent growth predicted by economists in a Reuters poll.
The quarterly growth was the slowest in the past three quarters, having risen 1.8 per cent year on year in the second quarter and 2.6 per cent in the January-March period.
Solid private consumption and a recovery in tourism prevented an even more disappointing performance by South-east Asia’s second-largest economy.
Sluggish global demand kept exports subdued, though the planning agency noted signs of improvement in the current quarter.
“Overall, the Thai economy continues to expand. But if we want to make the economy expand better than this, it must be restructured, especially in the industrial sector,” planning agency chief Danucha Pichayanan told a press conference.
A NEWSLETTER FOR YOU
Friday, 8.30 am
Asean Business
Business insights centering on South-east Asia's fast-growing economies.
“In the fourth quarter, export momentum began to improve. It should make industrial production better as well.”
The weak GDP data underscored the need for fiscal and monetary policy to “focus on growth over inflation,” said Kobsidthi Silpachai, head of capital markets research of Kasikornbank.
The Bank of Thailand will next review policy on Nov 29 after a surprise hike in the key rate to a decade high of 2.5 per cent in September. Kobsidthi said he expected the central bank to hold rates steady through the first half of 2024.
SEE ALSO
Investor confidence in Thailand remained low despite the end of a protracted political deadlock following an election in May that resulted in defeat for the pro-military ruling party that sprang from the 2014 coup.
The coalition government that emerged from the election is led by the populist Pheu Thai party, and includes parties backed by its longtime foe, the military.
It has planned a raft of stimulus measures aimed at kick-starting an economy that has struggled in the wake of the pandemic and grew just 2.6 per cent last year.
The planning agency said it expected the economy to grow 2.5 per cent in 2023, the lower end of a previous forecast range of 2.5 per cent to 3.0 per cent, but sees GDP growth of between 2.7 per cent and 3.7 per cent next year.
Next year’s figures did not factor in the government’s signature stimulus plan of injecting US$14 billion into the economy via a “digital wallet” handout scheme for 50 million people to spend in their localities within six months.
On a quarterly basis, GDP rose a seasonally adjusted 0.8 per cent in the September quarter, versus a forecast rise of 1.2 per cent, and against 0.2 per cent growth in the previous quarter.
Danucha said the agency would await more clarity on the stimulus plan before factoring it in to its growth outlook.
NESDC predicted a 2 per cent contraction in exports, a key driver of Thai growth, for this year, having earlier forecast a 1.8 per cent fall seen earlier. For 2024, it expects exports to rise 3.8 per cent.
The agency maintained its forecast of foreign tourist arrivals at 28 million this year, and predicted 35 million visitors in 2024. Pre-pandemic 2019 saw a record of nearly 40 million arrivals. REUTERS
Share with us your feedback on BT's products and services
