BoT optimistic about Q3 growth on tourism, stimulus
Private consumption expands moderately
Thailand's economic growth in the third quarter is likely to improve from the second quarter's reading, mainly thanks to positive tourism growth and the government's economic stimulus measures, says the Bank of Thailand.
"GDP growth in the third quarter is expected to exceed the 2.3% year-on-year figure in the second quarter, supported by the government's stimulus package, growth in the tourism sector and exports, which are expected to grow from last year's low base effect," said Don Nakornthab, senior director at the macroeconomic and monetary policy department.
Thailand's economy grew at the slowest pace in almost five years in the second quarter as exports and tourism deteriorated, buffeted by US-China trade tensions and the strong baht.
GDP rose 2.3% from a year ago, down from 2.8% in the first quarter, the National Economic and Social Development Council (NESDC) reported.
The economy grew by 0.6% on a quarterly basis.
Annual exports are forecast to contract by 1% year-on-year assuming shipments grow in the second half, said Mr Don.
Exports in US dollar terms contracted for two consecutive quarters this year, down by 4% and 4.2% in the first and second quarters year-on-year, respectively.
The contraction was attributed to the economic slowdown in key trading countries, escalating protectionist trade measures as well as a high base effect and limitations in domestic production for some agricultural commodities, said the NESDC.
In August, the economy expanded at a slower pace compared with the previous month, with several economic indicators moderating in almost every spending category, according to the central bank.
Private consumption indicators moderately expanded from the same period last year.
Spending on durable goods significantly contracted following a decrease in every category of vehicle sales, partly because of weaker income, together with credit tightening by financial institutions following a deterioration in credit quality.
Spending on non-durable goods expanded at a softer pace, mainly from moderated fuel usage, in line with contracting domestic vehicle sales.
Private investment indicators also contracted from the same period last year.
Investment in machinery and equipment contracted, mainly from the decline in capital goods imports and the number of newly registered motor vehicles for investment.
Investment in construction contracted from both the continued decline in permitted construction area and construction material sales.