Thailand’s economy grew at its weakest pace in five years in 2019, as exports and public investments slowed, and the impact from the coronavirus epidemic is set to pile more pressure on Southeast Asia’s second-largest economy this year. The trade-dependent economy has been buffeted by the Sino-US trade war, soft domestic demand and a delayed fiscal budget and drought. Tourism was one bright spot the authorities were hoping would help offset slowdowns elsewhere.
Some analysts expected the central bank to further cut rates from record lows to bolster growth this year.
Gross domestic product expanded 1.6 percent in the October-December quarter from a year earlier, versus 2.1 percent forecast in a Reuters poll and the third quarter’s upwardly revised 2.6 percent growth.
On a quarterly basis, the economy grew 0.2 percent in the October-December quarter, the National Economic and Social Development Council (NESDC) said, in line with an upwardly revised 0.2 percent in July-September.
“We maintain our 2020 GDP growth forecast at 1.9 percent, reflecting our view that the slowdown will extend into 2020, due to the Covid-19 outbreak, a budget delay and drought,” said Charnon Boonnuch, an economist of Nomura in Singapore.
“We still pencil in another 25 basis-point policy rate cut by the (Bank of Thailand), likely delivered in Q2.”
The state planning agency on Monday cut its forecasts for 2020 economic growth to 1.5-2.5 percent from 2.7-3.7 percent, and lowered its outlook for exports, the main growth driver, to 1.4 percent from a 2.3 percent increase projected in November.
Earlier this month, the Bank of Thailand cut its policy rate to a record low of one percent, and Governor Veerathai Santiprabhob said there was room to help growth if needed.
It forecasts two million fewer tourists from China alone, which accounted for 28 percent of Thailand’s tourism revenue last year.
Tags: Thai economy growth
