Thailand’s economy on weaker note in 2019

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The Thai economy is likely to stay below the 3.5-per cent growth benchmark projected earlier for the first quarter of 2019 because of the global economic slowdown that weakened exports and ailing domestic consumption. Thailand’s deputy prime minister and chief economist Somkid Jatusripitak said delays in private investment during the general election also dampened GDP growth in the first quarter.

The news came after Thailand’s economic performance in the final quarter of last year rose 3.7 per cent year-on-year, up from a revised 3.2 per cent in the third quarter, beating expectations on higher domestic demand and growing tourism arrivals. The healthy results led the overall economy to grow at the fastest pace in six years in 2018. The economy expanded 4.1 per cent for the full year, compared with a revised four per cent in 2017.

Economic growth was one per cent in the year of the latest military coup in 2014, three per cent in 2015 and 3.3 per cent in 2016. For the whole of 2019, GDP is projected by the government to grow in a range of 3.5-4.5 per cent.

Thailand’s manufacturing decline accelerated to 2.5 per cent year-on-year in March from 1.6 per cent in February, a steeper drop than the consensus estimate of 2.1 per cent. By sectors, electronics have been a stand-out source of weakness in both exports and manufacturing. Weakness in steel and rubber were an added drag in March.

Cumulative manufacturing output fell by 1.2 per cent year-on-year in the first quarter of 2019, a sharp negative swing from the 2.5 per cent growth in the previous quarter. A dip in the consumer confidence index, a slowdown in motor vehicle sales and a fall in tourist arrivals were adding to the weakness.

Somkid said the economic slowdown is expected to continue throughout the second quarter of the year, noting that the impact from the trade war between the US and China deepened after the US recently raised import tariffs on $200 billion worth of Chinese exports from ten to 25 per cent, and Beijing vowed to increase tariffs on roughly $60 billion worth of US goods in retaliation.

But Somkid insisted that Thailand’s economic fundamentals were healthy, with massive foreign reserves and relatively low public debt to GDP. The new government may need to implement more measures to stimulate the economy, he said. Public debt stood at 41.9 per cent of GDP in 2018, far below the 55 per cent limit set for the fiscal and monetary framework.

Thailand’s own growth forecast for 2019 is lower than the World Bank’s which foresees the Thai economy expanding by 3.8 per cent this year and 3.9 per cent next year. The earlier projection of economic growth in 2019 has been slightly revised down from 3.9 per cent, in the expectation pressure on trade would limit export growth this year and next.

The estimation excluded local political factors. If the formation of the next government was delayed, investment in both the government and private sector would be affected in 2021, the World Bank said.



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The Thai economy is likely to stay below the 3.5-per cent growth benchmark projected earlier for the first quarter of 2019 because of the global economic slowdown that weakened exports and ailing domestic consumption. Thailand’s deputy prime minister and chief economist Somkid Jatusripitak said delays in private investment during the general election also dampened GDP growth in the first quarter. The news came after Thailand's economic performance in the final quarter of last year rose 3.7 per cent year-on-year, up from a revised 3.2 per cent in the third quarter, beating expectations on higher domestic demand and growing tourism arrivals....

Reading Time: 2 minutes

Auto Draft

The Thai economy is likely to stay below the 3.5-per cent growth benchmark projected earlier for the first quarter of 2019 because of the global economic slowdown that weakened exports and ailing domestic consumption. Thailand’s deputy prime minister and chief economist Somkid Jatusripitak said delays in private investment during the general election also dampened GDP growth in the first quarter.

The news came after Thailand’s economic performance in the final quarter of last year rose 3.7 per cent year-on-year, up from a revised 3.2 per cent in the third quarter, beating expectations on higher domestic demand and growing tourism arrivals. The healthy results led the overall economy to grow at the fastest pace in six years in 2018. The economy expanded 4.1 per cent for the full year, compared with a revised four per cent in 2017.

Economic growth was one per cent in the year of the latest military coup in 2014, three per cent in 2015 and 3.3 per cent in 2016. For the whole of 2019, GDP is projected by the government to grow in a range of 3.5-4.5 per cent.

Thailand’s manufacturing decline accelerated to 2.5 per cent year-on-year in March from 1.6 per cent in February, a steeper drop than the consensus estimate of 2.1 per cent. By sectors, electronics have been a stand-out source of weakness in both exports and manufacturing. Weakness in steel and rubber were an added drag in March.

Cumulative manufacturing output fell by 1.2 per cent year-on-year in the first quarter of 2019, a sharp negative swing from the 2.5 per cent growth in the previous quarter. A dip in the consumer confidence index, a slowdown in motor vehicle sales and a fall in tourist arrivals were adding to the weakness.

Somkid said the economic slowdown is expected to continue throughout the second quarter of the year, noting that the impact from the trade war between the US and China deepened after the US recently raised import tariffs on $200 billion worth of Chinese exports from ten to 25 per cent, and Beijing vowed to increase tariffs on roughly $60 billion worth of US goods in retaliation.

But Somkid insisted that Thailand’s economic fundamentals were healthy, with massive foreign reserves and relatively low public debt to GDP. The new government may need to implement more measures to stimulate the economy, he said. Public debt stood at 41.9 per cent of GDP in 2018, far below the 55 per cent limit set for the fiscal and monetary framework.

Thailand’s own growth forecast for 2019 is lower than the World Bank’s which foresees the Thai economy expanding by 3.8 per cent this year and 3.9 per cent next year. The earlier projection of economic growth in 2019 has been slightly revised down from 3.9 per cent, in the expectation pressure on trade would limit export growth this year and next.

The estimation excluded local political factors. If the formation of the next government was delayed, investment in both the government and private sector would be affected in 2021, the World Bank said.



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