Thailand’s economic growth weakened unexpectedly on subdued investment and foreign demand, official data showed on Monday. <\/p>\n
Gross domestic product grew 1.8 percent annually after rising 2.6 percent in the first quarter, the National Economic and Social Development Council, or NESDC, reported. The pace of growth was forecast to improve to 3.1 percent.<\/p>\n
On a quarterly basis, economic growth eased sharply to 0.2 percent from 1.7 percent a quarter ago. <\/p>\n
Consequently, the government downgraded its full year growth outlook to 2.5-3.0 percent from 2.7-3.7 percent. <\/p>\n
On the expenditure-side, household spending growth accelerated to 7.8 percent from 5.8 percent a quarter ago. The annual expansion was driven by tourism activities. The rise in tourist arrivals and low level of unemployment boosted household income.<\/p>\n
Meanwhile, as a result of high level of healthcare spending in 2022, government expenditure slid 4.3 percent after a 6.3 percent decline. <\/p>\n
Further, gross fixed capital formation rose at a slower pace of 0.4 percent, following a 3.1 percent rise a quarter ago. <\/p>\n
Total export growth decelerated as the result of a 5.7 percent fall in merchandised exports. Service receipts increased notably due to growing number of foreign tourists. At the same time, imports of goods and services slid 2.4 percent.<\/p>\n
Changes in inventories at current market prices decreased to total THB 94.6 billion.<\/p>\n
Headline inflation is forecast to be in the range of 1.7 – 2.2 percent in 2023 and the current account is projected to register a surplus of 1.2 percent of GDP. <\/p>\n
With inflation likely to remain low and the economic recovery showing signs of faltering already, the Bank of Thailand is unlikely to tighten monetary policy this year, Capital Economics’ economist Shivaan Tandon said. <\/p>\n