Thailand's Q2 GDP beats forecast as full-year outlook is raised

Bangkok, Thailand's economy grew 1.9% in the April-June quarter, outpacing forecasts, according to official data released on Monday. The National Economic and Social Development Council, the government's planning agency, raised its outlook for the year, anticipating growth between 2.0% and 2.5%, up from a previous estimate of 1.5% to 2.5%. The stronger-than-expected growth was driven by increased private investment, government spending, and exports, the council said.

The economy contracted by 0.2% on a seasonally adjusted basis in the same quarter, a smaller decline than the 0.6% poll forecast. Growth in the January-March quarter was revised to 2.8% on the year and 0.6% for the quarter. The economy expanded 2.4% last year, lagging regional peers since the COVID-19 pandemic, with high household debt restraining consumption.

The baht strengthened after the GDP data release, while the benchmark index rose by 1%. The central bank left its key interest rate unchanged at 1.00% in June, with no immediate need for a rate hike, according to Bank of Thailand Governor Vitai Ratanakorn. The next monetary policy review is scheduled for August 26.

Exports are expected to rise by 15.1% this year, up from a previous forecast of 9.6%, and tourism is projected to see 32 million foreign arrivals, matching the previous forecast. Unemployment remained low at 0.96% in the second quarter, down from 0.94% in the previous quarter. Inflation slowed to 1.95% in July, within the central bank's target range of 1% to 3%.