Thai growth dips in second quarter
THAILAND’s economic growth slowed in the three months to June, new figures released yesterday showed, days after a string of bomb and arson attacks struck the country’s crucial tourism sector.
High household debt, weakening exports, slumping foreign investment and low consumer confidence have cramped growth in what for years was Southeast Asia’s flagship economy.
A military junta seized power in 2014 vowing to end years of political instability and kickstart the lacklustre economy.
Thailand’s growth has since picked up slightly, mainly off the back of ramped-up government spending and continued tourist arrivals.
But it remains comparatively low compared to its neighbours’.
Figures released by the National Economic and Social Development Board showed second-quarter GDP growth was up slightly at 3.5 percent year on year.
But the seasonally adjusted quarter-on-quarter growth was 0.8pc, a dip from 1pc in the first quarter.
In a briefing note, Captial Economics said Thailand already faces strong headwinds from global growth concerns and the country’s waning export competitiveness, adding that trend will be compounded if political instability continues.
Last week nearly a dozen bombs exploded in popular tourist resorts in the country’s south, killing four and wounding scores more, including European tourists.
No group has claimed it is responsible for the bombing spree which hit a sector that makes up around 10pc of the economy.
“There is a significant risk that the bombings prove to be the start of a violent phase of Thailand’s long-running political conflict,” Krystal Tan, an economist at Capital Economics said.
“The big picture is that concerns about political stability will persist until Thailand is able to find a lasting solution to the deep political divide between the urban elite and the poorer rural population,” she added.
The kingdom has been beset by a decade of political turmoil which began when the military toppled prime minister Thaksin Shinawatra in 2006.
Years of competing streets protests, short-lived governments and outbreaks of violence have followed, culminating in another coup in 2014 that toppled the administration of Mr Thaksin’s sister Ms Yingluck.
A vendor adjusts mannequins displaying clothing in Bangkok. Thailand's economy is forecast to grow at 3.3 percent and conditions are projected to expand in the second half of the year, mainly boosted by public spending.