Thai Growth Slumps to Weakest Since 2014 as Trade War Takes Toll

Suttinee Yuvejwattana
Thai Growth Slumps to Weakest Since 2014 as Trade War Takes Toll

(Bloomberg) -- Thailand’s economy grew at the slowest pace since 2014 in the first quarter as weaker global demand and trade tensions weighed on exports.

Gross domestic product rose 2.8% from a year ago, down from a revised 3.6% in the fourth quarter, the National Economic and Social Development Council said on Tuesday. That’s the slowest pace since the end of 2014. The expansion was in line with the Bloomberg survey estimate of 2.8%.

The trade fallout from U.S.-China tension and Brexit both impacted the economy, Thosaporn Sirisumphand, the secretary general of the council, said in a briefing in Bangkok. A high year-earlier base, moderating tourism and lower government investment amid political uncertainty sapped growth, he said.

The second half should be better than the first six months, in part because the global trade environment is expected to improve, he said.

Key Insights

The export-reliant economy is facing increasing risks that are weighing on the outlook: weaker global demand, rising U.S.-China trade tensions, a stronger currency, subdued tourism growth, and political uncertainty amid a drawn-out election contest The NESDC said growth will probably come in at 3.3% to 3.8% this year compared with an earlier forecast of 3.5% to 4.5%. The forecast assumes a new government will be set up smoothly and that the budget will be delayed at most by four months, it said.Australia and New Zealand Banking Group Ltd. recently downgraded its GDP projection for 2019 to 3.2% from 3.8%The Bank of Thailand left its benchmark rate unchanged in May amid a weaker growth backdrop. Policy makers hiked rates for the first time in seven years in December

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GDP rose a seasonally adjusted 1% in the first quarter compared with the previous three months, lower than the 1.3% median estimate in a Bloomberg surveyClick here for a breakdown of GDP drivers

--With assistance from Tomoko Sato, Margo Towie and Karthikeyan Sundaram.

To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Sunil Jagtiani

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