BANGKOK: Thailand’s economy expanded 0.3 per cent on-quarter in January-March, official data showed Monday, highlighting the task ahead for the military junta that seized power in a coup last year vowing to kick-start growth after months of political instability.
And in another blow to the country’s year-old government the National Economic and Social Development Board (NESB) lowered its growth forecast for this year.
Year-on-year first quarter growth came in at three per cent, the NESB said.
But Krystal Tan, an Asia economist at Capital Economics, said that figure was “exaggerated by a low base in the first quarter of 2014, when growth contracted and political unrest was at its peak”.
At the time Bangkok was paralysed by protests against the democratically elected government of Yingluck Shinawatra, whose administration was eventually toppled in the coup.
The NESB said it expected the economy to grow 3.0-4.0 per cent this year, down from an earlier prediction of 3.5-4.5 per cent. Growth came in at just 0.7 per cent in 2014, its weakest pace in three years.
In February, Thailand’s finance minister said he had been told by junta chief Prayut Chan-O-Cha to push for at least 4.0 per cent growth for 2015, something many analysts thought optimistic.
The World Bank estimates growth for 2015 will be closer to 3.5 per cent.
The ruling junta has vowed to pump billions of dollars into the economy, mainly through long-planned infrastructure schemes but analysts say government spending and increased tourist revenues have failed to offset falling exports and weakening demand at home.
“There has been no sign of a strong economic recovery,” Benjarong Suwankiri, an economist at TMB Bank in Bangkok told Bloomberg News.
“Growth will continue to be sluggish, as only the government’s spending has showed signs of picking up, while consumption, investment and exports are still very weak.”
Thailand’s key agricultural sectors — including rice and rubber — have struggled with falling global prices, curbing the amount of crops produced and taking money out of Thais’ pockets.
The country also remains one of Southeast Asia’s most indebted economies, discouraging consumer confidence.
Last month Thailand’s central bank cut its benchmark interest rate from 1.75 per cent to 1.5 per cent, its lowest since July 2010.