Asia Economy

Thailand's economy surprisingly stalls in the third quarter

Key Points
  • Southeast Asia's second-largest economy showed no expansion in July-September from the previous three months on a seasonally adjusted basis, data showed on Monday.
  • The quarterly reading was the weakest since the first quarter of 2014, when the economy shrank 0.4 percent.
  • The National Economic and Social Development Board, a government planning agency, on Monday downgraded its 2018 GDP growth forecast.
Stores along the Bangla road near the Patong Beach in Phuket on October 12, 2018.
Jewel Samad | AFP | Getty Images

Thailand's economy surprisingly stalled in the third quarter, as exports and tourism softened, and the state planning agency showed less optimism on growth for all of 2018.

Gross domestic product showed no growth in the third quarter from the second, on a seasonally adjusted basis, the National Economic and Social Development Board (NESDB) said.

That was the worse result since the first quarter of 2014, when the economy shrank 0.4 percent, and compared with a Reuters poll forecast of 0.6 percent growth. All the economists polled expected some growth.

On an annual basis, third-quarter expansion was 3.3 percent, compared with the poll's 4.2 percent projection, and the second quarter's 4.6 percent.

The planning agency on Monday downgraded its 2018 GDP growth forecast to 4.2 percent instead of the previous 4.2-4.7 percent range. It now expects exports to rise 7.2 percent this year, rather than 10.0 percent.

For 2019, it expects GDP growth of 3.5-4.5 percent Capital Economics said Thai growth "is unlikely to rebound much over the coming year." Its forecast for 2019 is 3.5 percent.

Southeast Asia's second-largest economy, which is heavily reliant on external demand, earlier this year saw a pick-up in growth, although exports have slowed and tourism took a hit after a boat accident in July killed 47 Chinese visitors.

Thailand's exports to China, its second-biggest market, slumped 14 percent in September on-year.