Political uncertainty takes toll on Thai growth

According to the World Bank’s Thailand Economic Monitor (July edition), risk to the economic outlook in Thailand are primarily domestic.

Political uncertainty is a key risk, and lingering doubts about the cohesiveness of the newly established 19-party coalition government and/or delays in the implementation of large planned public infrastructure projects could negatively impact both investor sentiment and consumer confidence, thereby weakening domestic demand.

In recent years, Thailand’s economy has expanded at a slower pace than those of its regional comparators, says the World Bank.

Growth forecast for 2019 downgraded from 3.8 percent to 3.5 percent

Meanwhile, ongoing trade tensions between the U.S. and China could further weaken demand for Thailand’s exports and discourage private investment in export-oriented industries.

Due to rising external headwinds, the growth forecast for 2019 has been downgraded from 3.8 percent to 3.5 percent. Private consumption is expected to drive growth in 2019, supported by private investment, and public infrastructure spending.

Today the Economic Intelligence Center (EIC), Siam Commercial Bank’s research unit, has cut its forecast for the country’s 2019 economic growth to 3.1% from the 3.3% previously seen.

Thailand’s GDP growth rate is projected to recover gradually over the near term assuming policy continuity and the implementation of large public infrastructure projects, especially those related to the Eastern Economic Corridor. Given Thailand’s strategic location, continued trade integration could support trade in goods and services, potentially compensating for some…

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