In the third quarter of 2023, Thailand’s economy saw a 1.5% growth, marking a slowdown for the second consecutive quarter. Despite predictions of 2.4% growth by economists, this figure was lower than the 1.8% growth seen in the previous quarter. Several factors contributed to this decline, including public spending, inventories, and goods exports. However, private consumption and tourism remained strong.
The new prime minister of Thailand, Srettha Thavisin, took office in late September and faced the challenge of leading the country to long-term economic recovery amid political turmoil. While there was optimism about tightening monetary policies in the future, weak GDP figures for the third quarter intensified concerns about the country’s economic outlook.
In response to these challenges, the Bank of Thailand raised its key interest rate for the eighth straight time in September and expected growth and inflationary pressures to accelerate in the coming year. However, analysts at Nomura predict a pause in central bank policies in the near term with a possibility of rate cuts by the second quarter of 2024. The weak GDP figures may also lead to government initiatives such as large digital wallet handouts that could impact the Thai baht’s value.
Throughout this year, Thailand’s currency has already weakened against the dollar compared to last year’s levels. Any further policy changes could exacerbate its decline even further.
In conclusion, Thailand’s economy is facing challenges with slowing growth rates and concerns about political turmoil affecting long-term recovery plans. The Bank of Thailand is taking steps to address these issues through monetary policy measures while analysts are predicting a pause in central bank policies with potential rate cuts on horizon which might affect currency value negatively