BANGKOK – Thailand’s economy grew at a poor 0.6 per cent in the third quarter, prompting authorities to again clip the full year growth forecast, in a blow to a junta which has vowed to kick-start the economy following their coup.
Prime Minister Prayut Chan-O-Cha, the former army chief who led the May coup, has pinned the junta’s legitimacy to injecting zip into Thailand’s once dynamic economy after months of political protests froze government spending, scared off tourists and battered consumer spending. But so far there have been few signs of economic revival, despite a pledge to increase government spending and push through much-needed infrastructure projects.
Between July and September the economy expanded 0.6 per cent compared to the previous year, the National Economic and Social Development Board reported. It grew 1.1 per cent on a quarter-by-quarter basis, the board said, adding Thailand’s economy achieved a weak 0.2 per cent growth across the first nine months of the year.
“The Thai economy in 2014 is expected to grow by 1.0 per cent,” NESDB added, trimming its growth outlook from 1.5 to 2.0 per cent. But the board said Southeast Asia’s second largest economy should rebound next year to grow at 3.5 to 4.5 per cent on improving exports, internal investment and a recovery of Thailand’s key tourism sector, which has been pummelled in recent months.
Tourists have shied away from Thailand, where martial law has been in place since the coup, which followed months of sometimes violent anti-government protests. The murder of two British holidaymakers on a resort island in September also caused concern.
The Immigration Bureau said there had been a near nine per cent drop in tourist arrivals between January and October, compared to the same period in 2013. But “the calmer political climate and the government’s tourism promotion campaign should help to revive tourist arrival growth in the upcoming high season,” according to Krystal Tan of Capital Economics. An uptick in the US economy should also stimulate Thai exports, she added.