Finance Ministry concedes weakened economy


Thailand’s Q3 economy has slowed down due to declining domestic consumption, reflected through shrinking value added tax (VAT) collection, according to the Finance Ministry.

Kulaya Tantitemit, executive director of the Macroeconomic Policy Bureau, said VAT collection decreased by 7.3 per cent in Q3 while private sector investment in machinery declined by 7.9 per cent annually.

On the positive side, investment in construction expanded 3 per cent/year, reflecting a growth in the property market which was recovering, she said.

Ms Kulaya said Thai export values to the US and European Union markets increased by 0.7 per cent and 8.5 per cent/year respectively despite an export slowdown by 1.7 per cent/year in Q3.

Though the government has heavily relied on local consumption, its dependence on exports cannot be abruptly disrupted, she said.

Tourism was another economic driving force for Thailand which enjoyed a 26.1 per cent growth, or arrivals of 6.75 million tourists, in Q3, she said, adding that public debt ratio against gross domestic product (GDP) was at 44.6 per cent, as of August.

Thailand’s economic growth should be 3.3 per cent in the second half of the year while the Finance Ministry will adjust the GDP projection again in December from an earlier forecast at 3.5-4 per cent, she said.

The Bt2.2 trillion investment for infrastructure development and spending on water management projects next year should be vital in stimulating the country’s economy, she concluded.