Thai growth dips in sec­ond quar­ter

The Myanmar Times - - International Business -

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.

Photo: EPA

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.

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