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Thailand GDP Q3 2023

Thailand: Economic growth grows at softest pace since Q4 2022 in Q3

GDP growth ebbed to 1.5% year on year in the third quarter, from 1.8% in the second quarter. Q3’s reading marked the slowest growth since Q4 2022. On a seasonally-adjusted quarter-on-quarter basis, economic growth gathered traction, rising to 0.8% in Q3, from the previous period’s 0.2% expansion.

Household spending improved to 8.1% year-on-year in the third quarter, which marked the best reading since Q3 2022 (Q2: +7.8% yoy). Public consumption fell at a sharper rate of 4.9% in Q3 (Q2: -4.3% yoy). Meanwhile, fixed investment growth sped up to 1.5% in Q3, from the 0.4% expansion in the previous quarter. Exports of goods and services growth fell to 0.2% in Q3, marking the worst reading since Q4 2022 (Q2: +0.6% yoy). In addition, imports of goods and services contracted at a sharper rate of 10.2% in Q3 (Q2: -2.3% yoy).

The economy should gain speed next year from 2023. Manufacturing production will rebound on the back of faster investment growth and stronger external demand. Declining interest rates will also underpin activity. A weaker-than-expected performance of China’s economy poses a downside risk.

Commenting on the outlook, Enrico Tanuwidjaja and Sathit Talaengsatya, economists at UOB, stated:

“In Q4 2023, we expect growth momentum to only slightly improve on the back of a softer private consumption weighed on by tighter financial conditions, and a slow normalization of the tourism sector, amid a slump in government spending and weak exports of goods. We therefore revised down our growth projection for 2023 to 2.3% from our previous estimate of 2.7% and maintained the projection for 2024 at 3.6%.”

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