GDP figures disappoint expectations in Q3 – UOB

Economists at UOB Group Enrico Tanuwidjaja and Sathit Talaengsatya assess the latest GDP figures in Thailand.

Key Takeaways

Thailand’s economy grew at a slower-than-expected pace of 1.5% y/y in 3Q23 from 1.8% y/y in 2Q23, much lower than the market expectations (Reuters Poll +2.4% and Bloomberg +2.2%). On a seasonally adjusted basis, real GDP expanded by 0.8% q/q (2Q23: +0.2%), below the +1.3% q/q median estimate by Bloomberg Survey. During the Jan-Sep period, the Thai economy expanded by 1.9% y/y. The weaker-than-expected growth outturn was weighed by exports of merchandise and government expenditure, while private consumption and tourism continued to be the key growth drivers. 

The authorities revised down the growth projection for 2023 to 2.5% from the previous estimate of 2.8% in Aug, and the Thai economy is projected to grow in the range of 2.7%-3.7% in 2024, supported by expectations of improvements in exports, private consumption, and investment, as well as the tourism sector, benefiting from wider visa-free policies. The 3Q23 GDP growth confirmed our expectation for a slower growth momentum; however, it came in lower than our estimate. In 4Q23, we expect growth momentum to only slightly improve on the back of a softer private consumption weighed on by tighter financial conditions, and a slow normalization of the tourism sector, amid a slump in government spending and weak exports of goods. We therefore revised down our growth projection for 2023 to 2.3% from our previous estimate of 2.7% and maintained the projection for 2024 at 3.6%.