Thailand says GDP growth fell in 2023, piling rate cut pressure

South-East Asia’s second-largest economy grew 1.8% last year, down from 2.6% in 2022. — Reuters

BANGKOK: Thailand’s economic recovery lost momentum last year and missed official forecasts, according to government spokesman Chai Wacharonke, potentially piling pressure on the central bank to pivot to early easing.

South-East Asia’s second-largest economy grew 1.8% last year, down from 2.6% in 2022, Chai said yesterday, citing estimates from the Finance Ministry’s Financial Policy Office that is due to be released today.

That’s below the Bank of Thailand’s projection of 3.6% made earlier last year, Chai said in a statement to reporters given through the LINE app.

In November, the central bank further slashed its gross domestic product (GDP) growth estimate to 2.4%.

Prime Minister Srettha Thavisin and his advisers may use the latest GDP estimate to buttress their claim that the economy is in crisis and revive a push for lower interest rates.

The premier earlier this month said the decade-high interest rate amid a string of negative inflation readings was hurting the economy.

The central bank’s next rate meeting is on Feb 7. The official GDP data is expected to be released by the National Economic and Social Development Council on Feb 19.

The economic slowdown last year was mainly due to a contraction in manufacturing, according to the Financial Policy Office’s statement Chai shared with reporters. The office estimated exports to have contracted 1.5% in 2023.

The country’s GDP growth is forecast to accelerate to 2.8% this year, supported by exports and tourism, the office said. — Bloomberg