Declining exports weighed heavily on economic growth.
Thailand's economy grew at a slower pace in Q2 at 2.3% YoY from 2.8% from the previous quarter, in the weakest reading since the end of 2014.
OCBC Treasury Research attributed the growth slowdown to the negative growth of exports at -6.1%.
This was caused by slowdown of global economy and the trade dispute between US and China for goods, and lower transport service brought by lower international trade and slowdown in foreign tourists for services, according to UOB.
Meanwhile, non-agricultural sector expanded 2.6% YoY but agriculture declined 1.1% YoY, which UOB attributed to lower paddy, sugarcane, and fruit yields.
Manufacturing dipped 0.2% YoY as export-oriented industries like computer, rubber and plastic products moderated. Meanwhile, tourism-related sectors like food service, trade, communication and transport grew 3.7%, 5.9%, 9.3% and 2.5% YoY, respectively.
Private consumption softened, with non-farm household income and employment decreasing, whilst private investment gradually expanded for machinery and equipment as well as construction investments. Public investment also slightly increased.
With that, both UOB and OCBC revised down their projected 2019 growth to 2.8% YoY from 3.5% and 3.4%, respectively. This is in line with state planning agency NESDC's projected growth lowered to 2.7% to 3.2%, from 3.3% to 3.8%.
Thailand is expected to struggle to post a growth rate higher than 3.0% amidst heightening macro-economic uncertainties, according to OCBC.
On the bright side, private consumption is tipped to continue expanding due to low inflation and the government's welfare card program providing additional support for low-income earners, according to UOB.
Public and private investments, especially infrastructure projects in Eastern Economic Corridor, may also rise in Q4 2019. The government also unveiled a US$10.2b fiscal package to boost growth for multiple sectors, particularly tourism.
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