In the third quarter of 2023, Thailand’s economy grew at a slower rate of 1.5% compared to the predicted 2.4% growth and lower than the previous quarter’s growth rate of 1.8%. The factors that dragged down growth included public spending, inventories, and goods exports, while private consumption and tourism remained strong. This weak GDP performance has intensified concerns about the country’s economic outlook.

Srettha Thavisin, Thailand’s new prime minister, took office in late September and faces the challenge of leading the country to long-term economic recovery amidst political turmoil. Despite optimism surrounding tightening monetary policies in the future, weak GDP figures have raised doubts about Thailand’s economic prospects.

The Bank of Thailand raised its key interest rate for the eighth straight time in September, with expectations that growth and inflationary pressures would accelerate in the coming year. However, analysts at Nomura predict a pause in central bank policies in the near term, with a possible second-quarter rate cut by 2024. The government may respond to weak GDP figures by pushing for large digital wallet handouts, which could impact the Thai baht further weakening against the dollar this year.

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