BANGKOK – Thailand’s economy in the first half of the year is nearing recession, with growth less than one per cent, pressured by ongoing political unrest in the country.
According to Kasikorn Research Centre (K-Research), Thailand was on the verge of recession, with average growth over the first half of this year at only 0.8 per cent, with household and government spending as well as investment and tourism decreasing.
The research centre said the Thai economy was now driven solely by exports, while positive factors, including political stability and recovery in overseas markets, were hoped for in the second half, despite inflationary concerns.
According to K-Research Managing Director, Dr Charl Kengchon, the prolonged political uncertainty has severely affected Thailand’s overall economic conditions, while pressuring domestic spending in the first quarter, with decreasing household and government spending, investment and tourism.
K-Research said exports over the same period scarcely expanded, with growth at close to zero per cent.
It said the first quarter economy shrank 1.8 per cent quarter-on-quarter (qoq) and grew 0.7 per cent year-on-year.
“The qoq negative growth reflects the country’s heightened risk of entering a recession,” it said.
The centre said in the second quarter of 2014, political tension would remain the major factor for the overall economy, which was likely to face a difficult recovery period.
Domestic spending and investment are expected to fall further, it added.
K-Research predicted that the Thai gross domestic product (GDP) growth could reach three per cent for the second half of this year and 1.8 per cent for all of 2014.
Last year, Thailand’s GDP grew 2.9 per cent.