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BANGKOK:Thailand’s economy grew at a much slower-than-expected pace in the third quarter, weighed down by weak exports and government spending, the state planning agency said on Monday.
Gross domestic product (GDP) expanded 1.5 per cent in the July-September quarter from a year earlier, the National Economic and Social Development Council (NESDC) said, down from the 2.4 per cent growth predicted by economists in a Reuters poll.
The quarterly growth was the slowest in the past three quarters, having risen 1.8 per cent year-on-year in the second quarter and 2.6 per cent in the January-March period.
Solid private consumption and a recovery in tourism prevented an even more disappointing performance by Southeast Asia’s second-largest economy.Sluggish global demand kept exports subdued, though the planning agency noted signs of improvement in the current quarter.
Investor confidence in Thailand remained low despite the end of a protracted political deadlock following an election in May that resulted in defeat for the pro-military ruling party that sprang from the 2014 coup.
The coalition government that emerged from the election is led by the populist Pheu Thai party, and includes parties backed by its longtime foe, the military.
It has planned a raft of stimulus measures aimed at kick-starting an economy that has struggled in the wake of the pandemic and grew just 2.6 per cent last year.
The planning agency said it expected the economy to grow 2.5 per cent in 2023, the lower end of a previous forecast range of 2.5 per cent to 3.0 per cent, but sees GDP growth of between 2.7 per cent and 3.7 per cent next year.
Next year’s figures did not factor in the government’s signature stimulus plan of injecting $14 billion into the economy via a “digital wallet” handout scheme for 50 million people to spend in their localities within six months.
“Overall, the Thai economy continues to expand. But if we want to make the economy expand better than this, it must be restructured, especially in the industrial sector,” planning agency chief Danucha Pichayanan told a press conference.
“In the fourth quarter, export momentum began to improve. It should make industrial production better as well.”
On a quarterly basis, GDP rose a seasonally adjusted 0.8 per cent in the September quarter, versus a forecast rise of 1.2 per cent, and against 0.2 per cent growth in the previous quarter.
Danucha said the agency would await more clarity on the stimulus plan before factoring it in to its growth outlook.
Manufacturing declined for the fourth consecutive quarter, falling 4 per cent, after a 3.2 per cent fall in the previous quarter.
NESDC predicted a 2 per cent contraction in exports, a key driver of Thai growth, for this year, having earlier forecast a 1.8 per cent fall seen earlier. For 2024, the NESDC expects exports to rise 3.8 per cent.
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