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    Export Declines And Political Uncertainty Make Thailand's Economy Slow Down

    2019/8/8 12:03:00 0

    ExportDeclinePoliticsEconomy

    Thailand's growth in the first quarter was 2.8%, lower than the previous forecast. Thailand's economic growth continued to slow in the first quarter as the US China trade dispute over exports and political uncertainty shrouded the country. According to government data, the growth rate of the second largest economies in Southeast Asia was 2.8% over the same period last year, while Thailand's growth rate in October to December was 3.6%.

    Growth rate slowed down compared with previous general forecasts. Previously, Kasikorn Research predicted growth of 3.5%, Thailand chamber of Commerce predicted growth of 3.7%, and Reuters's median survey of economists was 3%. The outcome of the March impasse election hampered private investment and domestic consumption, and the political stalemate could further drag the economy down in the coming months. In the Thailand general election, no party gained absolute majority, and political bargaining would delay policy making.

    In 2018, its economic growth in the whole year reached 4.1%. Although the national economic and Social Development Commission (NESDB) lowered its growth forecast in 2019 to 3.3%-3.8%, the decline in exports meant that Thailand might not be able to achieve this growth rate. NESDB also lowered its export outlook from 4.1% previously forecast to 2.2%. Overseas shipments declined by 1.64% between January and March, due to weak global demand. Analysts expect the annual export growth rate to be between 0.5% and 3.2%, far below the government's target of 8%. Exports account for more than 60% of Thailand's gross domestic product.

    NESDB expects private investment to increase and accelerate public spending, especially large infrastructure projects, which can support the economy. But NESDB also said that domestic consumption is unlikely to grow in line with expectations.

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