BANGKOK – Thailand on Monday cut its economic growth forecast for this year after exports fell short of expectations and consumer spending faded.
Southeast Asia’s second-largest economy is likely to grow 3 per cent this year instead of 3.8-4.3 per cent predicted in August, the National Economic and Social Development Board said.
Export growth was lower than expected while the domestic economy was mainly driven by government expenditure, the economic planning agency said in a report.
It said the lower forecast was also partly because automobile production would not reach the target of 2.5 million vehicles in 2013 as the government’s tax incentives for first-time car buyers expired.
Known mainly for its southern resort islands and high quality rice, Thailand is also a manufacturing base for several global automakers, including General Motors Co. and Toyota Motor Corp.
Thailand’s economy expanded in the July-September quarter after contracting in the first half of the year, with gross domestic product rising 1.3 per cent from the previous quarter.
The report said people spent less due to income and financial constraints such as higher household debt.
Car sales in Thailand dropped to 145,801 vehicles in the third quarter from 193,756 vehicles in the previous quarter.
The NESDB forecasts the Thai economy to grow 4.0-5.0 per cent in 2014, thanks mainly to global economic recovery and investment under the government’s flood prevention and infrastructure plans.
Compared with a year earlier, gross domestic product rose 2.7 per cent in the third quarter, slowing from 2.9 per cent in the previous quarter.