Thailand chart book - Slower growth, eye on election outcome


The economy ended 2018 on a firm note. Moderation lies ahead with growth to slow to 3.8%. The BOT continues to maintain that a policy buffer to defend against future contingencies is necessary.
Radhika Rao23 Apr 2019
Photo credit: AFP Photo


• The economy ended 2018 on a firm note, with full-year growth at a five-year high. Moderation lies ahead with growth to slow to 3.8%, owing to a pre-election claw back in public spending and tougher trade environment
• The current account surplus likely peaked in 2017 and is expected to narrow to around 6% of GDP in 2019
• Fiscal stability is not at risk as FY20 deficit is set at 2.4% of GDP and public debt levels are below mandated thresholds
• Base effects are likely to prop 1H inflation prints before easing back in the second half. Oil price bounce is likely to feed-through the headline, but not pose a threat to the BOT targets
• The Bank of Thailand continues to maintain that a policy buffer to defend against future contingencies is necessary
• Rate hikes are, however, not imminent given weak inflation and a strong currency. A pause is likely this year
• From a valuation perspective, the THB looks on the high side
• Political outcome on May 9 will be watched closely



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Radhika Rao

Economist – India, Thailand & Eurozone
radhikarao@dbs.com

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