BANGKOK – The World Bank said Monday that Thailand’s economy is expected to expand 1.5% this year, the slowest pace in Southeast Asia, mainly due to the collapse in domestic demand since the breakout of political unrest late last year.
The World Bank’s latest projection was half that of its previous estimate of 3% in April.
The cut was “driven by relatively slow recovery of consumption and exports,” said Ulrich Zachau, the World Bank’s country director for Southeast Asia. “We do see a recovery, but it’s slow.”
High household debt and lingering economic and political uncertainty continue to weigh on private consumption, which is expected to expand 0.3% this year before it improves to 1.5% in 2015.
The Washington-based lender said exports are projected to increase by 0.7% as shipment of the country’s major products–such as hard disk drives, metal and steel, petroleum products, chemical and agroproducts–fell. Exports in 2013 rose 4.2%.
Thailand is expected to expand 3.5% in 2015 as public and private investment continue to improve on the back of a more stable political situation.
Exports are likely to grow at a higher rate than this year, while the country’s tourism sector is expected to perform better, the bank said.
Write to Warangkana Chomchuen at [email protected]