The Thai economy expanded at the fastest pace in a year in the second quarter, as eased pandemic-era restrictions boosted activity and tourism, reinforcing views that more rate hikes will be needed to curb inflationary pressures.
Southeast Asia’s second-largest economy is making a steady recovery after the lifting of pandemic curbs, but still faces headwinds ranging from inflation at 14-year highs to slowdowns among partner economies and weaker global demand.
The government slightly revised its 2022 economic growth forecast to 2.7% to 3.2% from an earlier 2.5% to 3.5% range. Last year’s 1.5% growth was among the slowest in Southeast Asia.
Data from the National Economic and Social Development Council (NESDC) showed on Monday (15 Aug) that the Thai economy grew an annual 2.5% in the June quarter – the fastest since the second quarter of 2021.
That compared with a forecast 3.1% rise in a Reuters poll and a revised 2.3% growth in the March quarter.
NESDC head Danucha Pichayanan told a news conference that the pace might “not be that high,” possibly because of decreased investment and last year’s high base of 7.7% annual growth.
He added that the economy expanded 2.4% in the first half, and “the trend will continue later this year.”
Capital Economics said in a note that “Thailand’s economy kept rebounding in the second quarter of the year on the back of a reopening boost.” However, it expects inflation to weigh on consumer spending and investment, with exports restrained by a global economic slowdown. (NNT)