Thai Q2 GDP growth slows sharply amid weak global demand, govt cuts 2023 forecast
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The economy grew 1.8 per cent in the April-June period from a year earlier.
PHOTO: AFP
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BANGKOK – Thailand’s economy grew at a much slower-than-expected pace in the second quarter, data showed on Monday, as weak exports and slower investment undercut strength in tourism and prompted the government to downgrade its 2023 growth forecast.
South-east Asia’s second-largest economy has been hobbled by slackening global growth, led by its main trading partner China, and falling investor confidence due to a protracted period without a government following elections in May.
Thailand’s gross domestic product (GDP) grew 1.8 per cent in the April to June period from a year earlier, the National Economic and Social Development Council (NESDC) said, well below the 3.1 per cent expansion expected by economists in a Reuters poll.
GDP had risen 2.6 per cent year on year in the first quarter, revised down from 2.7 per cent stated earlier.
On a quarterly basis, GDP rose a seasonally adjusted 0.2 per cent in the June quarter, also sharply under a forecast rise of 1.2 per cent.
The second quarter was hurt by export volumes falling 5.7 per cent year on year and dragging manufacturing output down by 3.3 per cent, while government spending also declined 4.3 per cent.
The global demand weakness prompted the government to cut its 2023 GDP growth forecast to between 2.5 per cent and 3 per cent from a range of 2.7 per cent to 3.7 per cent.
Adding to the headwinds, NESDC head Danucha Pichayanan warned that investor confidence will suffer further if problems arise in the transition to a new government.
“If there are drastic events in the transition, it will affect investor confidence,” he said.
Thailand has been under a caretaker government for five months and faces prolonged uncertainty after the winner of the May election, Move Forward, was blocked from forming a government by conservative legislators allied with the royalist military.
On Tuesday, Parliament will convene to vote for a new prime minister when second-place Pheu Thai’s candidate, real estate tycoon Srettha Thavisin, will be nominated.
First-quarter GDP was revised to 1.7 per cent from an earlier 1.9 per cent increase.
As weak global demand crimps exports, Thailand’s economy has been supported by its vital tourism sector and private consumption growth.
The agency maintained a forecast of 28 million foreign tourist arrivals in 2023, but expected tourism revenue to decline, said Mr Danucha.
It projected exports to drop 1.8 per cent in 2023 versus an earlier forecast for a 1.6 per cent fall. REUTERS
