Economic Slowdown in Thailand: A Potential Crisis Ahead

Thailand’s economy is experiencing slow growth for the second consecutive quarter, with a 1.5% year-on-year expansion, which is lower than the anticipated 2.4% by economists and the 1.8% growth experienced in the previous quarter. Public spending has narrowed due to populist policies, despite private consumption and tourism remaining strong, leading to signs of weakening in the country’s economy. The Bank of Thailand has raised its key interest rate for the eighth time in September, and analysts expect it to continue picking up next year. Meanwhile, Nomura analysts anticipate a potential cut in the policy rate in 2024 due to a weak Q3 GDP outcome, which could impact the Thai baht, which has seen a decline of 1.3% against the dollar this year and is projected to fall for the fourth time in a year.