A shaky post-election landscape, global slowdown and trans-Pacific trade conflict are being blamed for Thailand’s slowest quarter since 2014.
Government economists downgraded their expectations for the year yesterday after announcing that first-quarter expansion fell to 2.8 percent, mostly fueled by public and private spending.
The National Economic and Social Development Board now predicts maximum annual growth of 3.8 percent instead of 4.5 percent, bringing it more in line with independent forecasts.
The largest contributing factor in the decline was the Sino-American trade war, which devalued Thai exports by 3.6 percent during the first three months, according to board Secretary General Thossaphorn Sirisamphan. Expectations for the export sector were nearly halved to 2.2 percent from 4.1 percent.
Thossaphorn added that a resolution to the political uncertainties created by March’s general elections would also help improve the economy by increasing investor confidence in government projects and installing a government ready to enact further stimulus measures.
The quarter’s economic activity depended heavily on increases in both consumer and government spending.
Consumer spending has grown by 4.6 percent while public sector splurging increased by 3.3 percent so far this year.
In January, the World Bank lowered its Thai growth forecast to 3.8 percent; the IMF puts real GDP growth for 2019 at a more conservative 3.5 percent.
Thailand’s economy has grown by an average of 3.5 percent since 1980, according to the IMF. It hit peaks in 2010 and 2012 with growth of 7.5 and 7.2, respectively.