Somkid: Growth likely below 3.5% target
Exports weaken, investment delayed
The Thai economy is likely to stay below the 3.5% growth benchmark projected earlier because of the global economic slowdown that weakened exports and ailing domestic consumption.
Deputy Prime Minister Somkid Jatusripitak said delays in private investment during the general election also dampened GDP in the first quarter.
The National Economic and Social Development Council (NESDC) is scheduled to unveil the first quarter's economic reading tomorrow.
Thailand's economic performance in the final quarter of last year rose 3.7% year-on-year, up from a revised 3.2% 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% for the full year, compared with a revised 4% for 2017.
Export value grew by 7.7%, while private consumption and total investment grew by 4.6% and 3.8%, respectively. Headline inflation averaged 1.1% and the current account recorded a surplus of 7.4% of GDP.
Economic growth was 1% in 2014, 3% in 2015, 3.3% in 2016 and 4% in 2017.
In 2019, GDP is projected by the NESDC to grow in a range of 3.5-4.5%.
Mr Somkid said the economic slowdown is expected to continue until 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 US$200 billion worth of Chinese exports from 10% to 25% and Beijing vowed to increase tariffs on roughly $60 billion worth of US goods in retaliation.
Mr Somkid said the private sector is still baulking at investment, waiting for a new government to form.
"The government pledges for its remaining months in office to speed up infrastructure projects and those in the Eastern Economic Corridor to shore up the economy," he said.
Mr Somkid predicted that the trade war would be prolonged because US President Donald Trump is running in next year's general election.
"The trade war is no longer an economic conflict between the US and China," he said. "It is now a political war."
But Mr Somkid insisted that Thailand's economic fundamentals are 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% of GDP in 2018, far below the 55% limit set for the fiscal and monetary framework.