Even though the economy got off to a rough start in the fourth quarter, the Bank of Thailand remains optimistic that the period's reading will fare better than the third quarter's.
Private consumption, tourism and a lower-base effect for exports will support economic growth in the three months to December, said Don Nakornthab, senior director of the economic and policy department at the central bank.
He did not comment on whether fourth-quarter growth would expand at 2.8% year-on-year, reaching the full-year growth goal of the National Economic and Social Development Council (NESDC) of 2.6%.
The central bank is set to revise its forecast for GDP growth in 2019 and 2020 at the December meeting, where a downgrade is anticipated after a weaker-than-expected reading in the third quarter. The Bank of Thailand projects growth to expand by 2.8% this year and 3.3% next year.
The economy grew 2.4% year-on-year in the third quarter, marginally improving from 2.3% in the previous quarter but below the 2.8% seen in the first three months of the year. This prompted the NESDC to cut its 2019 GDP forecast again to 2.6% from an earlier projection of 2.7-3.2%.
Mr Don said the economy continued on a decelerating trend in October.
Merchandise exports contracted again last month, mainly because of the economic slowdown of trading partners, consistent with deterioration in manufacturing production and private investment indicators.
The value of payment-based merchandise exports, both including and excluding gold, dropped 5% in October from a year earlier.
The contraction of exports seen in several categories could be due to the slowdown of trading partners, the continued downturn in the electronics cycle with no clear sign of recovery, and the drop in global crude oil prices, coupled with the temporary maintenance shutdown of oil refineries, leading to the contraction of petroleum-related product exports, both in terms of price and quantity.
The value of exports in some categories, including agro-manufacturing products, appliances and automotive, continued to expand, partly as substitutions for Chinese products in the US market.
Moreover, exports of hard disk drives grew for the first time in 12 months, thanks to the relocation of production bases to Thailand. As a consequence of shrinking merchandise exports, manufacturing output continued to decline.
Private investment indicators in October continued to deteriorate from the same period last year, in line with weak domestic and external demand.
Public spending growth swung back to a contraction after September's expansion, given delays in the fiscal 2020 budget and state enterprises' capital spending, particularly disbursement by the Mass Rapid Transit Authority of Thailand.
Amid the downbeat data, private consumption and tourism were bright spots.
Private consumption indicators expanded at a higher rate than in the previous month, thanks to the government's stimulus measures, which boosted spending on non-durable goods and services.
"We must watch whether the stimulus, particularly from the Taste-Shop-Spend scheme, in October stole future spending," Mr Don said. "Private consumption in November and December might be slow if that's the case."
He also sounded a bullish note for next year, noting that accelerating public spending in 2020 after this year's delays and improving global trade and private investment will help the economy grow at a faster pace than in 2019.