Thailand last year recorded its slowest economic growth in three years, as political unrest curbed local consumption, while lower agricultural prices and cooling global demand hurt exports.
GDP rose 0.7 percent last year, the National Economic and Social Development Board said in Bangkok yesterday, matching the median estimate of 15 analysts in a Bloomberg survey.
GDP grew 2.3 percent in the three months through December from a year earlier, compared with the median of 2 percent in a separate survey.
Thai Prime Minister Prayuth Chan-Ocha, the army chief who took power after a coup in May last year, is struggling to accelerate budget spending after an US$11 billion stimulus package failed to spur local demand.
Exports fell for a second consecutive year for the first time in at least two decades, and the IMF forecasts only a “modest” economic recovery this year as lower oil spurs consumption.
“Fiscal policy clearly needs to lead to jumpstart the economy,” said Weiwen Ng, a Singapore-based analyst at Australia & New Zealand Banking Group Ltd.
“The marginal boost from trimming the interest rate from already low levels is minimal,” even as the sequential momentum of the economy is improving, he said.
The economy grew at the slowest pace last year since 2011, when the worst floods in decades shuttered thousands of factories. Consumption rose 2.4 percent last quarter from a year earlier, compared with 1.8 percent in the previous three-month period, while investment climbed 3.2 percent from 2.9 percent, data showed.
The National Economic and Social Development Board maintained its growth forecast for this year of 3.5 percent to 4.5 percent, but cut its export growth estimate to 3.5 percent from 4 percent.
“Risk factors that we are facing are lower agricultural prices, uncertainties in the global economy, weakening key currencies and rising real interest rates,” said Arkhom Termpittayapaisith, the board’s secretary-general.
“But we believe supporting factors still outweigh the risk factors,” and first-quarter growth should be higher, he said.
The Bank of Thailand held its benchmark interest rate at 2 percent for a seventh straight meeting last month, and has said there is a growing probability that headline inflation may miss its target because of lower oil prices.
Low inflation has led to higher real interest rates, Arkhom said.
“Monetary policy should be supportive to economic recovery,” he said, adding that businesses still need help with funding costs.
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