Thai economic growth slows in March due to soft demand, tourism

THAILAND’S economic growth slowed in March due to weaker demand and tourism and was expected to have expanded about 1 per cent on a quarterly and annual basis, after stronger growth earlier in the year, the central bank said on Tuesday (Apr 30).

The slow growth in the first quarter comes from a high base in 2023, after tourism-reliant Thailand’s reopening from tight pandemic restrictions, Bank of Thailand (BOT) senior director Pranee Sutthasri said, adding there were some constraints on spending.

The BOT maintained its fullyear growth outlook of 2.6 per cent.

South-east Asia’s second-biggest economy recorded a current account surplus of US$1.1 billion in March, after a surplus of US$2 billion in the previous month, the BOT said.

March exports fell 10.2 per cent year on year, which Pranee said was consistent with the central bank’s outlook, while imports in the month were up 5.2 per cent from the same period last year.

Volatility in the baht has decreased, but it could weaken further in the second quarter due to external factors, though in line with regional peers, the BOT said.

“Factors pressuring the weak baht will ease in the second half of the year,” said BOT senior director Sakkapop Panyanukul.

Thailand’s finance ministry on Monday revised down its growth forecast for this year to 2.4 per cent from 2.8 per cent seen in January, but said it could reach 3.3 per cent if the government’s 500 billion baht (S$18.4 billion) stimulus plan was deployed in the fourth quarter as planned.

The ministry said exports and manufacturing output had weakened but the economy was still stable, despite the downward revision.

Government spending will help the economy in the second quarter after a delayed budget was passed only last week, said the BOT’S Pranee.

It would closely monitor government spending, stimulus programmes and geopolitical tensions.