Thai growth quickens in Q2 on higher consumption, tourism

BANGKOK: Thailand’s economic growth strengthened in the second quarter due to higher consumption, tourism and exports, official data showed on Monday (Aug 19), and the government narrowed its full-year growth forecast range.
Southeast Asia’s second-largest economy grew 2.3 per cent in the April-June quarter from a year earlier, data from the National Economic and Social Development Council (NESDC) showed, beating analysts’ expectations for a 2.1 per cent expansion in a Reuters poll.
In the January-March quarter of 2024, gross domestic product (GDP) rose an upwardly revised 1.6 per cent on the year.
On a quarterly basis, GDP grew a seasonally adjusted 0.8 per cent in the second quarter, lower than an upwardly revised 1.2 per cent expansion in the previous three months and a poll forecast for 0.9 per cent growth.
Private consumption continued to grow in the second quarter but public and private investments contracted, the state planning agency NESDC said in a statement.
The NESDC now expects GDP growth of between 2.3 per cent and 2.8 per cent this year, narrowing from its previous forecast range of 2.0 per cent to 3.0 per cent. Last year’s growth was 1.9 per cent.
Thailand’s economy has lagged regional peers as it faces high household debt and borrowing costs as well as sluggish exports amid a slowdown in top trading partner China.
The planning agency maintained its export growth forecast at 2 per cent for this year.
Kasem Prunratanamala, head of Thailand research at integrated financial services provider CGS International, said the latest GDP print is “not too bad, given that we have political uncertainties in the second quarter and the global economic outlook wasn’t too good”. 
The major task for Thailand’s new Prime Minister Paetongtarn Shinawatra and her government would be to revive the economy, he told CNA’s Asia Now on Monday. 
“Although the GDP in the second quarter wasn’t too bad, it was just 2.3 per cent, which is actually way below our potential GDP growth,” he added. 
“So I think her government task is to jumpstart the economy and make it grow, probably to about 3 per cent level, for the medium and longer term.”
Some economists believe Thailand needs economic reform, rather than economic stimulus. This comes as the fate of a stimulus plan to boost consumption is in doubt after the country’s leadership change. 
“If you look at Thailand’s economic structure, we now have high household debt of over 90 per cent of GDP. So the consumption-led stimulus measures may not help the economy that much,” said Kasem. 
“I think the reimbursement or distribution needs to tie up with some form of upskill or reskill of those underprivileged people, so that they can move on and earn their living rather than relying on government help again and again.”