Thailand’s economy slowed down for the second consecutive quarter, with GDP growth of 1.5% year on year for the quarter ending in September. This figure was lower than the 2.4% predicted by economists and below the 1.8% growth seen in the previous quarter. Public spending, inventories, and goods exports were cited as factors that dragged down growth, but private consumption and tourism remained strong.
The new Prime Minister of Thailand, Srettha Thavisin, took office in late September and faced the challenge of leading the country to long-term economic recovery amidst political turmoil. The weak GDP figures for the third quarter intensified concerns about the country’s economic outlook.
In response to weak GDP figures, the Bank of Thailand raised its key interest rate for the eighth straight time in September and expected growth and inflationary pressures to accelerate in the coming year. However, analysts at Nomura predict a pause in central bank policies in the near term, with a possibility of rate cuts by the second quarter of 2024.
To address concerns about economic slowdown, there is a possibility that the government may resort to large digital wallet handouts which could impact Thai baht’s value further. The currency has already weakened against dollar this year and additional policy changes could exacerbate its decline.
Overall, while there are challenges ahead for Thailand’s economy, there is still optimism surrounding a future of tightening monetary policies aimed at sustainable long-term economic recovery amidst political turmoil.