BANGKOK, 1 July 2015 – The recovery of the Thai economy is still slow and fragile and the drought problem now poses another risk factor to the recovery, says the Bank of Thailand (BOT).
Roong Mallikamas, Senior Director for Macroeconomic and Monetary Policy Department at the BOT, explained that for the month of May, tourism and state spending were the drivers of the economy while private sector consumption continued to slow. Consumption declined by 0.4% because of cautious spending by households. Private sector investment also dropped by 0.4%, due to businesses holding off on investments in machinery and equipment in the face of weak domestic and foreign demand for manufactured goods. She said exports shrank by 5.5% in May in line with the slow-down of ASEAN’s and China’s economies as well as the lackluster recovery of economies of the nation’s trading partners such as the United States, Japan and Europe. The prices of many export articles also declined in line with the lowered price of crude oil.
According to Mrs. Roong, current economic risk factors include uncertainties in the global economic recovery, the risk of Greece’s debt problem causing money market volatility, and diminished household income resulting from the drought.