The Thai economy grew at a slower than expected pace in the fourth quarter on contracting private investment and decelerating government spending, official data revealed Monday.
Gross domestic product logged an annual growth of 3.2 percent in the fourth quarter after rising 3.0 percent in the third quarter, the Office of the National Economic and Social Development Council said. However, this was weaker than economists’ forecast of 3.9 percent.
On a quarterly basis, economic growth eased notably to 0.4 percent from 1.2 percent a quarter ago. This was the slowest in four quarters.
Driven by the government’s economic stimulus measures and improving consumer sentiment, private consumption advanced 3.4 percent annually. At the same time, growth in government spending slowed to 5.4 percent from 6.1 percent.
Total investment gained 5.1 percent from the prior year as the 2.1 percent fall in private investment was offset by the 39.4 percent surge in public investment.
In the fourth quarter, the trade balance registered a surplus of $5.4 billion, which was less than a surplus of $5.8 billion in the third quarter.
The production-side of GDP showed that annual growth was primarily driven by acceleration in the agriculture sector growth to 1.2 percent. The non-agriculture sector expanded largely due to the 4.7 percent rise in service activities. Meanwhile, the industrial sector grew only 1.0 percent.
In 2024, Southeast Asia’s second largest economy expanded 2.5 percent, accelerating from 2.0 percent in 2023. The government forecast GDP growth of 2.3 – 3.3 percent this year.
The trade policies of the US government and private investments were considered as major challenges in achieving the growth forecast this year.
Headline inflation is estimated to be in the range of 0.5 – 1.5 percent and the current account is projected to record a surplus of 2.5 percent of GDP.
Capital Economics’ economist Shivaan Tandon said the economy is set to undergo a better year ahead with loose fiscal policy and further recovery in tourism spending.
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