,Thailand

Thailand's economy to grow 3.0% by 2020 as exports take hit

Businesses are also increasingly pessimistic.

The Thai economy is expected to grow by only 3% in 2020 from the previous projection of 3.5% amidst weak domestic demand, according to Fitch Solutions. In H1 2019, the economy expanded by an average of 2.6% YoY, a lower rate from a prior forecast of 4.1%

The strong appreciation of the Thai baht which aggravated the China-US trade tensions and the slowing regional growth has weighed on the country’s export competitiveness.

The current movement in external orders has led to a bearish domestic business sentiment. Business Confidence Index has declined to 47.9 in September 2019 from a reading of 50.0 in January of the same year, filtering through to a similarly pessimistic hiring sentiment, which will bode poorly on employment gains over the coming quarters.

The trade tensions with China has also indirectly affected Thailand’s tourism sector. Amidst China’s weak import demand, Fitch reckons that Chinese policymakers will remain reluctant in providing stimulus for domestic demand. This is expected to weaken Thailand’s tourist arrivals growth, as China contributes the largest tourist count and has been a significant driver of tourism growth in recent years. Tourism will also suffer more broadly from the baht’s strength, potentially resulting in a contraction in activity in the sector. In August, the three-month advanced booking rate fell to 25.5%,the lowest since 2017, representing a potential dangers for the sector.

If export weakness persists and tourism numbers decline, the outlook for the labour market is likely to moderate further. Given that household debt levels remain elevated, coming in at 68.9% of GDP in Q119, a weakening of labour market conditions could prompt a sharp draw back of consumption in favour of saving.

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Thanks to the renewal of interest in the Singapore market.
The electronics cluster showed the most optimism.
The initiative aims to improve the overseas service exports environment.
This is the group’s 2nd sustainability notes issuance in the SGD bond market.
A Jefferies report said Singapore banks have enough buffers.
HongkongLand, CapitaLandInvest, and ComfortDelGro showed the most growth.
Mizuho Securities Asia Limited will be the notes dealer.
The company’s first batch has been fully allocated in the country.
The total consideration of up to $539m over three years will take effect. 
This is to address the increased global demand for healthcare products.
Thanks to the company's improved distribution channels.
Hiring activities online increased by 55.7% in August.
CapitaLandInvest, Capland IntCom T, and Sembcorp Industries showed the most growth.
This low turnout is due to the large quantum of the project, experts say.