Thailand economy

Thai economy grows slower than expected in third quarter of 2019

BANGKOK (BLOOMBERG) – Thailand’s economy grew slower than expected in the third quarter and the government lowered its growth forecast for the full year as the country grapples with the impact of the US trade war -Chinese and a strong currency.

Gross domestic product rose 2.4% from a year ago, the National Council for Economic and Social Development said on Monday (Nov. 18), below the median estimate of 2.7% in a Bloomberg survey. with economists. The council lowered its GDP forecast for 2019 to 2.6% – from 2.7% -3.2% previously – and said growth is expected to accelerate to 2.7% -3.7% on next year.

Thailand’s trade-dependent economy has been hit by falling exports, a rising currency and mixed performance in the tourism sector. Earlier this month, the central bank lowered its benchmark interest rate to an all-time high and announced measures to slow the gains of the baht, which has been the best performing of the emerging markets over the past year, increasing about 9%.

Council secretary-general Thosaporn Sirisumphand called for more stimulus to complement a $ 10 billion (S $ 13.6 billion) program approved by the government in August. The global slowdown, drought and volatility remain major challenges for the economy, he said.

“We have to use all the tools we have because there are still a lot of risks that we cannot control,” Thosaporn told reporters in Bangkok. “We cannot be complacent.”

EXPORTS, CURRENCY

While the economy appeared to bottom out in the second quarter – where it grew 2.3%, its slowest pace in nearly five years – the rebound was more subdued than expected, Thosaporn said.

“The strength of the baht hurt exports and private investment in the third quarter,” he said. “We believe the strength of the baht can continue.”

The baht was at 30.245 per US dollar at 10:35 a.m. in Bangkok, little change from before the data was released.

“The worst is probably over for the economy, but a strong rebound is unlikely,” Gareth Leather, an economist at Capital Economics, wrote in a research note. “Exports will continue to suffer if, as we expect, global growth slows further. A high level of household debt will also limit private consumption growth.”

The NESDC said exports are now expected to decline 2% this year, from the 1.2% contraction it forecast in August. The economy is expected to recover in the last quarter of the year and accelerate through 2020, driven by government stimulus measures, the gradual recovery in exports and an improvement in tourism, the council said.


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