Current account surplus returns in December

Current account surplus returns in December

But overall economic growth at end of 2023 slow, says Bank of Thailand

Skyscrapers are seen beyond gantry cranes and shipping containers at Bangkok Port in Klong Toey. (Photo: Bloomberg)
Skyscrapers are seen beyond gantry cranes and shipping containers at Bangkok Port in Klong Toey. (Photo: Bloomberg)

Thailand recorded a current account surplus of $2.1 billion in December, reversing a deficit of $1.2 billion in the previous month, the central bank said on Wednesday.

Exports, a key driver of growth, rose 3% year-on-year in December from a year earlier, after a 3.9% gain in November, the Bank of Thailand (BoT) said in a statement posted on its website.

Imports in December fell 1.7% year-on-year.

Private consumption rose 0.1% from November and private investment dropped 2.4%, the central bank said, noting that economic activity would be supported in January by consumption and tourism.

The central bank said that spending on non-durable goods and services in December increased, partly because of government measures to reduce the cost of living. And while consumer confidence improved, it noted that spending on durable goods decreased, especially personal cars.

“Thailand’s economic growth slowed in December and the fourth quarter from the previous period as tourist expenditure and exports softened due to subdued global demand together with structural factors,” it said.

The National Economic and Social Development Council will release official fourth-quarter and full-year 2023 economic growth figures on Feb 19.

Southeast Asia’s second-largest economy grew by 1.5% in the third quarter from a year earlier, the slowest pace this year and less than expected, on weak exports and government spending.

Central Bank governor Sethaput Suthiwartnarueput told Reuters last week that he expected a similar growth rate for the fourth quarter of 2023, with full-year expansion seen below a previous forecast of 2.4%.

He also said 2024 economic growth could be below 3%, less than earlier forecast, but he reiterated that the economy was not in crisis as portrayed by the government.

The Ministry of Finance last week cut its 2023 economic growth forecast to 1.8% from 2.7% seen earlier. It also expects growth in 2024 to slow sharply to 2.8% from a previous forecast of 3.2%.

The government has repeatedly said the economy is in “crisis” and needs a big boost from its $14 billion digital handout scheme.

Prime Minister Srettha Thavisin - a real estate mogul and political newcomer - has also urged the central bank to cut the policy interest rate, which is at a decade-high of 2.50%, to help sluggish growth and suffering people and businesses.

The central bank’s Monetary Policy Committee will hold its first rate-setting meeting of the year on Feb 7.

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