Thai economic growth in the third quarter will likely expand at a higher pace than in the second quarter, as a gradual recovery in developed economies, particularly the US, can help to raise exports, says a Bank of Thailand official.
Mathee Supapongse, the central bank's senior director of macroeconomic and monetary policy, said the central bank also now estimates the country's second-quarter gross domestic product (GDP) will fail to reach the 4% year-on-year target.
Earlier, the Finance Ministry's Fiscal Policy Office also forecast second-quarter GDP growth would fall below 4%, while the National Economic and Social Development Board is scheduled to announce its figure on Aug 19.
Domestic consumption and private investment will increase in the third quarter following a rebound in Thai exports, said Mr Mathee.
The central bank is monitoring household debt closely, he said, adding that the rate will not likely increase during the slowdown.
It recently said rising household debt, which stood at 78% of GDP at the end of last year, limits the scope of a policy rate cut amid the sluggish economy.
Economic indicators show the Thai economy continued to grow moderately in June due to ebbing external demand from China, contributing to a slowdown in manufacturing production of export products and private investment, said the central bank.
Declining exports of farm products, fisheries items and manufacturing goods caused merchandise export value to drop by 3.5% year-on-year, although that was better than May's 5.1% decline.
Reduced production of processed seafood and hard disk drives caused the Manufacturing Production Index to dip 3.5% year-on-year while the Private Investment Index fell 4.1% as a result of the slowdown in machinery and equipment investment.
Private consumption stabilised as non-durable purchases increased, with fuel consumption and food and beverage imports leading the way.
Durable consumption declined due to shrinking car purchases.
The tourism industry continued its rapid expansion, growing by 25% year-on-year, as 2.1 million foreign tourists have arrived, mostly from China, Malaysia, India and Russia.
The repatriation of profits and dividends caused a deficit in the current account, while the capital account also posted a deficit.