Thailand’s economy grew at a slower rate of 1.5% year-on-year in the third quarter, marking the second consecutive quarter of economic slowdown. This figure was below the forecasted growth of 2.4% by economists and lower than the previous quarter’s 1.8% growth. Despite weak GDP data, public consumption, inventories, and exports of goods remained strong, while private consumption and tourism were also robust.
The new Prime Minister of Thailand, Sreta Tavisin, took office in September and faced challenges in leading the country to long-term economic recovery amid political turmoil. Although there was optimism about monetary policy tightening, weak third-quarter GDP data added to concerns about the country’s economic outlook. In response to this development, the Bank of Thailand raised its key interest rate for the eighth consecutive time in September and predicted that growth and inflationary pressures would pick up in the coming year.
However, analysts at Nomura anticipate a pause in central bank policy in the near term, with interest rate cuts possible by the second quarter of 2024. Weak GDP figures could lead to government pressure on large volumes of digital wallets, which could negatively impact the Thai baht’s value against other currencies such as the dollar. The currency has already weakened against other currencies this year due to various factors including political instability and trade tensions with major trading partners such as China and India.
Despite these challenges, there are still opportunities for growth in Thailand’s economy if policymakers can successfully navigate through political uncertainties and implement effective policies that support sustainable economic development.