Aug 15, 2022 02:50AM ET
By: AnalysisWatch
Thailand's economy expanded in the second quarter at its fastest pace in a year as eased COVID-19 restrictions boosted activity and tourism, reinforcing views that more rate hikes will be needed to curb inflationary pressures.
Southeast Asia's second-largest economy is gradually recovering from the lifting of pandemic-related restrictions but still faces problems such as a 14-year low in inflation, a slowdown in China and weaker global demand.
The government has slightly revised its economic growth forecast for 2022 to 2.7%-3% from an earlier range of 2.5%-3%. Last year's 1.5% growth was among the slowest in Southeast Asia.
Thailand's economy grew 2.5% in June, the fastest since the second quarter of 2021, according to data from the National Economic and Social Development Council (NESDC) released on Monday.
That's compared to a 3.1% growth forecast in a Reuters poll and a revised 2.3% growth in the March quarter.
The pace may "not be as high," possibly due to reduced investment and a high base from last year's 7.7% annual growth, NESDC head Danucha Pichayanan said at a press conference.
The economy expanded by 2.4% in the first half of the year and "this trend will continue for the rest of this year," he said.
"Thailand's economy continued to rebound in the second quarter of the year on the back of the reopening momentum," Capital Economics said in a note. However, it expects inflation to weigh on consumer spending and investment, and exports to be constrained by the global economic slowdown.
On a quarterly basis, gross domestic product (GDP) grew by 0.7% in the April-June period, against a forecast growth of 0.9% and a revised 1.2% increase in the first quarter.
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