Thailand’s economy grew by 1.5% in the quarter ending September, marking a slowdown for the second consecutive quarter. This was lower than the predicted growth rate of 2.4%, and below the 1.8% growth seen in the previous quarter. The slowdown can be attributed to several factors, including public spending, inventories, and goods exports. Despite this, private consumption and tourism remained strong.
In late September, Srettha Thavisin took office as Thailand’s new prime minister, facing the challenge of leading the country to long-term economic recovery amidst political turmoil. While there was optimism surrounding a future of tightening monetary policies, weak GDP figures for the third quarter intensified concerns about the country’s economic outlook.
To address these concerns, the Bank of Thailand raised its key interest rate for an eighth straight time in September and expected growth and inflationary pressures to accelerate in the coming year. However, analysts at Nomura predict a pause in central bank policies in the near term with a possibility of rate cuts by the second quarter of 2024. In addition to this, weak GDP figures may lead to government push for large digital wallet handouts which could impact Thai baht further weakening against dollar this year.
The new prime minister will have to navigate through these challenges while trying to maintain stability and growth for his country’s economy while also addressing political issues that have been plaguing Thailand for years now.