Q1 growth weakest in more than 4 years
BANGKOK: Thailand’s economy grew at its slowest pace in more than four years in the first quarter, and by less than expected, thanks to a drop in exports and public investment.
The state planning agency, reporting the January-March data yesterday, cut its forecast for this year’s growth to between 3.3 and 3.8 per cent from the between 3.5 and 4.5 per cent range seen in February and it lowered its estimate for this year’s exports, the main growth driver.
The outlook downgrade came amid rising global trade tensions and lingering political uncertainty at home as political parties are still vying to form a new government, likely to be a fragile one, after a March 24 election.
“The economy slowed markedly in the first quarter on the back of rising external headwinds and high political uncertainty,” said Charnon Boonnuch, a Nomura economist in Singapore.
For now, Nomura is keeping its full-year growth forecast of 3.4 per cent, though “the balance of risks remains tilted to the downside”.
With gross domestic product data from Singapore and Thailand yesterday, every major Southeast Asian economy has reported slower annual growth in the first quarter than in the final three months last year, rooted in the United States-China trade war and a global slowdown.
Thailand reported first quarter growth of 2.8 per cent — the smallest since 2014’s final period. That was slower than 3.0 per cent seen in a Reuters poll and the revised 3.6per cent pace for October-December.
On a quarterly basis, growth was a seasonally adjusted one per cent, weaker than the poll’s 1.4 per cent forecast.
The National Economic and Social Development Council cut its export growth outlook for this year to 2.2 per cent from 4.1 per cent.
Thailand’s exports, worth about two-thirds of the economy, dropped 3.6 per cent in the first quarter from a year earlier. They rose 7.2 per cent last year.
Also impacting the growth pace is that slowed gains for tourism and high household debt curbed consumer spending.