Q1 GDP grows 1.5% y/y, above forecast
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Q1 GDP grows 1.5% y/y, above forecast

A bank employee gathers baht notes at a Kasikornbank in Bangkok on Jan 26, 2023. (Photo: Reuters)
A bank employee gathers baht notes at a Kasikornbank in Bangkok on Jan 26, 2023. (Photo: Reuters)

Thailand's economy expanded 1.5% in the first quarter from a year earlier, official data showed on Monday, beating analysts' expectations.

On a quarterly basis, Southeast Asia's second-largest economy grew a seasonally adjusted 1.1% in the January-March quarter, data from the National Economic and Social Development Council (NESDC) showed.

Growth was driven by exports, private consumption and private investment, but public investment and government expenditure contracted, the planning agency said in a statement.

The quarterly growth meant the economy avoided a technical recession, after it had contracted by a revised 0.4% in the final quarter of 2023.

Economists in a Reuters poll had forecast gross domestic product (GDP) to expand 0.8% in the March quarter from a year earlier and 0.6% from the previous three months.

In the fourth quarter of 2023, GDP grew an annual 1.7%.

Thailand's economy has lagged regional peers as it confronts high household debt and borrowing costs as well was weak exports amid a slowdown in top trading partner China.

The stronger-than-expected GDP numbers could weaken the government's case for an interest rate cut, although new Finance Minister Pichai Chuhavajira has said he was more worried about people's access to finance than the level of interest rates.

For months, Prime Minister Srettha Thavisin has pushed for a rate cut, saying it would help the economy. The central bank has not bowed to the pressure, holding its key rate at a more than decade-high of 2.50%. The next rate review is on June 12.

The state planning agency NESDC now expects 2024 GDP growth of between 2.0% to 3.0%, slightly lower than its previous forecast of 2.2% to 3.2%. Last year's growth was 1.9%.

The agency predicted exports in 2024 would rise 2.0%, lower than the 2.9% increase projected earlier.

Headline inflation was seen at 0.1% to 1.1%, lower than a previous forecast and the BOT's target range of 1% to 3%.

The agency forecast 36.5 million foreign tourist arrivals this year, down from the 35 million projected earlier.

Thailand received 13.16 million foreign tourists from Jan 1 to May 12, up 39% year-on-year, with Chinese visitors topping the list at about 2.6 million. In pre-pandemic 2019, there were record numbers of nearly 40 million foreign tourists.

Last month, the finance ministry lowered its 2024 growth forecast to 2.4% from 2.8%, but said it might reach 3.3% if the government's flagship 500 billion baht household stimulus scheme is deployed in the fourth quarter as planned.

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