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Thailand economy in Q2 grew at slowest pace in nearly five years

Christian Fernsby |
Thailand's economy lost further momentum in the second quarter, growing at its slowest pace in nearly five years as the U.S.-China trade war continued to weigh on its exports.

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Gross domestic product expanded 2.3% in the second quarter from a year earlier, slowing from the 2.8% growth in the previous quarter, the National Economic and Social Development Board, the government's economic-planning arm, said Monday. The growth matched the median 2.3% forecast of nine economists polled by The Wall Street Journal.

Second quarter growth was the slowest since the 1.1% growth recorded in the third quarter of 2014.

Exports of goods and services contracted 6.1%, maintaining the same pace of decline from the previous quarter, the data showed.

The agriculture sector also contracted 1.1%, compared with a revised 1.7% growth in the first quarter.

However, domestic demand softened as private consumption which accounts for nearly half of the Thai economy rose 4.4%, compared with a revised 4.9% gain in the first quarter.

Government spending rose 1.1%, slowing from the revised 3.4% increase in the first quarter, while public investment gained 1.4% after declining in the previous quarter. Private investment rose 2.2% after gaining 4.4% in the previous quarter.

On a seasonally adjusted quarterly basis, the economy grew 0.6% versus economists' forecast for a 0.7% growth.

For 2019, the government body now expects the economy to grow 2.7%-3.2% from 3.3%-3.8% projected earlier. It expects exports to fall by 1.2% on year in 2019.

Weak global demand and a downturn in the tourism sector are likely to remain key drags on the economy over the coming quarters, Capital Economics said in a note.

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