Thailand's economic growth slowed more-than-expected in the third quarter on weak government spending.
Gross domestic product grew 3.2 percent year-on-year, slower than the 3.5 percent expansion seen a quarter ago, figures from the National Economic and Social Development Board revealed Monday. Economists had forecast the annual rate to ease to 3.3 percent.
Quarter-on-quarter, GDP advanced 0.6 percent in the third quarter, following a 0.7 percent rise in the second quarter.
In the first nine months, the economy registered an average of 3.3 percent growth. The board expects the economy to grow 3.2 percent this year compared to the previous forecast of 3-3.5 percent.
The Thai economic growth looks set to soften further over the coming quarters, due to high levels of household debt, lackluster global growth and continued political uncertainty, Krystal Tan at Capital Economics said.
The economist expects the passing of Thailand's king to probably cause some disruption to economic activity in the short term, but said the impact should be fairly modest and concentrated in certain sectors of the economy.
Export of goods and services was forecast to register 3.2 percent growth and private consumption and total investment were predicted to grow 3.0 percent each. The GDP growth was projected to be in the range of 3-4 percent next year.
Headline inflation was expected to be 1.0-2.0 percent, and the current account was forecast to register a surplus of 10.2 percent of GDP.
On the production side, agricultural output recovered in the third quarter, while non-agricultural sector expanded at a slower pace. Agricultural output gained 0.9 percent, reversing a 1.2 percent fall in the previous quarter. Non-agricultural growth eased to 3.2 percent from 3.8 percent.
The expenditure-side breakdown of GDP showed that household consumption grew 3.5 percent, while government spending declined 5.8 percent due to expedited disbursement in the earlier period.
Public investment expanded favorably by 6.3 percent, largely resulting from a 3.8 percent growth of government investment. Export of services accelerated and export of goods returned to show a positive growth.
by RTT Staff Writer
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