Ongoing political uncertainties and a slump in exports due to the U.S.-China trade dispute saw Thailand’s economy slow in the first quarter. Southeast Asia’s second-largest economy expanded 2.8% from a year earlier – the weakest in over four years – according to government data.
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%. Central bank policy makers alluded to potential hazards for the economy in minutes of their May 8 meeting that left the benchmark interest rate unchanged at 1.75 per cent, Reuters reported.
“The Thai economy was subject to heightened political uncertainties, which could have implications for economic growth, including a direct effect on government spending in the period ahead and an indirect effect on private consumption and investor confidence,” minutes of the bank’s monetary policy committee (MPC) meeting said. Continuing on that theme, another entry said: “Investors remained cautious to invest in Thai assets partly due to domestic political uncertainties.”
According to the minutes, the committee would need to wait for more clarity due to global economic and domestic political uncertainties. “Therefore, current accommodative policy would remain appropriate. Going forward, further policy rate adjustment would be gradual and follow a datadependent approach,” they said.