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Thailand’s economic expansion likely accelerated modestly in the third quarter from the slowest pace in almost five years, weighed down by the strength of the country’s currency.
Gross domestic product probably rose 2.8% in the three months through September from a year earlier, according to the median estimate in a Bloomberg survey of economists. The data will be released Monday.
Exports and tourism have taken a knock from the baht’s 9.2% climb against the dollar in the past 12 months -- the strongest in emerging markets -- as well as a global economic slowdown sparked by U.S.-China trade tensions.
“The negative impact from weak exports has spread to local investment and consumption,” said Somprawin Manprasert, chief economist at Bank of Ayudhya Pcl in Bangkok. “The economy is actually more fragile now. Any shock, even a small one, can derail the economic recovery.”
The Bank of Thailand has cut interest rates twice this year and last week eased rules on capital outflows, seeking to limit currency strength.
What Bloomberg’s Economists Say
“The growth outlook for the rest of 2019 and into 2020 appears materially weaker with the further increase in tariffs by the U.S. on China. This is likely to weigh on exports and investment, and may have negative spillover to consumption.”
Tamara Henderson, Asean economist
Companies ranging from flag carrier Thai Airways International Pcl to coal miner Banpu Pcl have blamed the baht for making business conditions harder.
“Baht strength is bad for us as we use the dollar as our functional currency, and the baht strengthened a lot in the third quarter,” Somruedee Chaimongkol, Banpu’s chief executive officer, said in a Nov. 13 presentation.
The government has said it will implement more stimulus if needed, adding to a package of steps already announced worth more than $10 billion.
(Updates with economist’s comment in the sixth paragraph.)
