BANGKOK – Thailand’s economy continued to slow in the first quarter as the U.S.-China trade dispute hit exports and political uncertainty hangs over the nation.
Southeast Asia’s second-largest economy expanded 2.8% from a year earlier, government data showed Tuesday. Thailand notched growth of 3.6% in the October-December period.
The slowdown was lower than analyst projections. Kasikorn Research forecast 3.5% growth, the Thai Chamber of Commerce University saw a 3.7% expansion, while the median in a Reuters poll of economists was 3%.
March’s inconclusive election has held back private investment and domestic consumption, and the gridlock is likely to weigh further on the economy in the coming months. No party secured an absolute majority in the poll, and the political haggling is stalling policymaking.
The economy posted 4.1% growth for the full year of 2018. While the Office of the National Economic and Social Development Council (NESDC) on Tuesday revised down its 2019 growth forecast to a range of 3.3%-3.8%, the slump in exports means Thailand may struggle to match this rate.
The agency also cut its export outlook to 2.2% growth from a previously forecast 4.1%.
Overseas shipments dropped 1.64% in the January-March amid thin global demand. Analysts see annual export growth of between 0.5% and 3.2% — far from the government’s target of 8%.
Exports account for more than 60% of Thailand’s gross domestic product.
NESDB expects rising private investment and accelerated public spending, particularly on mega infrastructure projects, to support the economy. But the agency said domestic consumption was unlikely to grow in line with expectations.
By Apornrath Phoonphongphiphat
Nikkei Asian Review