May 17, 2019 / 8:15 AM / 3 days ago

Thai first-quarter GDP growth year-on-year seen at lowest in nearly four years as exports sag: Reuters poll

BANGKOK (Reuters) - Thailand’s economic growth likely picked up in January-March from the previous three months but the annual pace likely was the weakest for any quarter in almost four years, a Reuters poll showed.

FILE PHOTO: A view of the port of Bangkok, Thailand May 26, 2016. REUTERS/Jorge Silva/File Photo

Weak exports, a key driver of Thai growth, and private investment offset some of the boost from higher consumption and public spending, analysts say.

For seasonally-adjusted quarterly growth, the median for 13 economists in the poll was 1.4% in the first quarter. That would top the previous period’s 0.8% and be the fastest on-quarter pace in a year.

For growth on a yearly basis, the median for 17 economists giving forecasts was 3.0% in January-March - which would be the weakest since 2015’s second quarter. The annual pace for October-December was 3.7%.

Finance Minister Apisak Tantivorawong said on Thursday first-quarter growth might not look good as exports fell.

Charnoon Boonnuch, a Nomura economist in Singapore, expects annual growth of just 2.7%, and said escalating trade tensions likely will worsen the export performance and “continue to weigh on growth”.

“Combined with domestic political uncertainty, we see downside risks to our full-year 2019 GDP growth forecast of 3.4%,” he added.

The poll’s forecast for full-year 2019 growth was 3.7%, slowing from last year’s 4.1%, the best pace in six years.

Southeast Asia’s second-largest economy is heavily reliant on external demand, but exports have contracted this year amid global trade tensions while tourism has slowed.

Political uncertainty is hanging over the economy as a new government has yet to be formed after a March 24 election, the first since a 2014 army coup. That has kept investors away, Deputy Prime Minister Somkid Jatusripitak said this week.

Most economists think the central bank will hold its policy interest rate steady throughout 2019.

The National Economic and Social Development Council, which compiles GDP data, has forecast 2019 growth of 3.5% to 4.5%, with exports up 4.1%. It may cut them on Monday.

In January-March, exports fell 3.6% from a year earlier, and declined 3.8% from the previous three months, while annual growth in foreign tourist numbers slowed to 1.5%, according to the central bank.

First-quarter private investment declined 1.3% year-on-year, while growth in consumption slowed to 3.5%.

Government investment spending rose 7% in the March quarter from a year earlier, finance ministry data showed.

Additional reporting by Satawasin Staporncharnchai and Kitiphong Thaichareon; Editing by Richard Borsuk

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