Thailand’s economy has slipped back into recession, contracting for two consecutive quarters as a stronger baht and a weaker global economy put the brakes on exports, government data showed yesterday.
GDP shrank by 0.2 percent in the three months through September from the previous quarter, when it contracted by a revised 0.6 percent, according to official estimates.
A recession is usually defined as two or more consecutive quarters of negative economic growth.
On a year-on-year basis, Thailand’s economic growth slowed to 6.7 percent in the third quarter, from 9.2 percent in the April-to-June period.
The Thai economy had remained relatively resilient in the face of deadly political violence earlier this year, but it has not been immune to a slowdown in US and European economic growth as well as a slumping US dollar.
The Thai baht, along with other Asian currencies, has been surging against the greenback, hitting a 13-year high. A stronger currency undermines the competitiveness of Thai exports.
Faced with an uncertain outlook, Thailand’s central bank held its benchmark interest rate steady at 1.75 percent last month, pausing after two consecutive rises in the cost of borrowing since July.
Monetary policymakers are next due to meet on Dec. 1.
The kingdom has imposed several measures to curb the strength of the baht, including a tax for foreigners investing in Thai bonds.
Export growth slowed to 15.7 percent last month from a year earlier, after a 21.2 percent expansion in September.
Despite the recent contraction, the government upgraded its GDP growth forecast for this year slightly to 7.9 percent thanks to a strong performance earlier in the year. Last year, the economy shrank 2.3 percent.
Growth is expected to slow next year to within a range of 3.5 to 4.5 percent.
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of