Thailand’s economy expanded faster than expected last quarter, aided by tourism, although the outlook remains fraught with risks after a leadership change last week has made the fate of a key stimulus program uncertain.
Gross domestic product in the three months through June rose 2.3% from a year earlier, the National Economic and Social Development Council said Monday. That compares with the 2.2% median estimate in a Bloomberg News survey and a 1.5% pace reported earlier for the first quarter.
The economy expanded 0.8% quarter-on-quarter, compared with a median estimate for a 1% growth. GDP rose 1.1% in the January-March period, based on an earlier report.
While the latest growth print showed an improved performance last quarter, it continues to lag an above-5% expansion of many of its peers in the region. With the fate of the US$14 billion ($18.36 billion) economic stimulus plan uncertain under the leadership of Paetongtarn Shinawatra, daughter of former leader Thaksin Shinawatra, calls for the central bank to lower borrowing costs may be reignited.
Paetongtarn — who succeeded Srettha Thavisin after he was ousted by the court last week — told reporters on Sunday that the cash handout plan needs further study to ensure its compliance with the law governing fiscal discipline. Under Srettha, the plan was to start handing out 10,000 baht each to adult Thais from November.
The Bank of Thailand, which had been pressured by Srettha to cut interest rates and help spur the economy, is widely expected to stand pat on Wednesday and keep the policy rate at the highest since 2013.
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The BOT has held the one-day repurchase rate at 2.5% since the fourth quarter even as inflation remained way below the 1%-3% target.
Thai central bankers have pushed back against rate cut calls, citing potential price risks from the cash giveaway plan. The BOT also said looser monetary settings would complicate efforts to lower household debt hovering above 90% of GDP.
