Thai growth slows to 1.9 per cent as energy prices counter stimulus
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On a seasonally adjusted quarterly basis, Thailand’s GDP contracted 0.2 per cent, against economists’ forecast of a 0.4 per cent drop.
PHOTO: AFP
BANGKOK – Thailand’s economic growth slowed dramatically in the second quarter, lagging behind its South-east Asian peers, as higher energy prices countered stronger investment and government stimulus.
Gross domestic product (GDP) in the three months through June rose 1.9 per cent from a year earlier, the National Economic and Social Development Council said on Aug 17.
That was faster than the 1.8 per cent median estimate in a Bloomberg survey but significantly slower compared with 2.8 per cent growth in the first quarter.
Thailand’s growth is again lagging behind that of the main ASEAN economies even as Prime Minister Anutin Charnvirakul’s government uses 400 billion baht (S$15.5 billion) of emergency borrowing to fund cash handouts and energy-transition projects.
On a seasonally adjusted quarterly basis, GDP contracted 0.2 per cent, against economists’ forecast of a 0.4 per cent drop. The baht was up 0.1 per cent against the dollar after the data release, while stocks were not trading yet.
The economy is expected to grow 2 per cent to 2.5 per cent in 2026, according to the National Economic and Social Development Council.
Thailand, which imports much of its oil and gas requirements from the Middle East, has been particularly exposed to the supply disruptions caused by the Iran war. Domestic demand and tourism, among the main contributors to Thai GDP, were meanwhile subdued during the quarter as higher energy costs squeezed household spending and business activity.
Neighbouring Vietnam leads ASEAN with growth of 8.39 per cent in the second quarter, followed by Singapore and Malaysia, with all three countries benefiting from supply chains plugged into the booming global AI sector.
The Bank of Thailand, which kept its policy rate at a near four-year low in June, said earlier that the economy likely bottomed in the second quarter and should recover in the third. It cited easing tensions in the Middle East and the roll-out of government stimulus measures. Bloomberg
