Thailand’s economy expanded less than expected in the last quarter of 2016 and the government left its forecast for growth this year unchanged, indicating recovery will remain a slow process.
Growth in October-December was 0.4 percent from the previous quarter, on a seasonally-adjusted basis, below the 0.6 percent seen in a Reuters poll. The government revised July-September growth to 0.4 percent, from 0.6 percent.
On an annual basis, the economy expanded 3.0 percent in the final quarter, matching the poll forecast.
The national planning agency, leaving its 2017 forecast at three to four percent, said expanding exports plus higher crop production and state spending will aid growth this year.
But analysts are doubtful the Thai growth pace can be much higher than 2016’s 3.2 percent.
“We think growth in Thailand will disappoint,” Capital Economics wrote.
It said the exports will be held back by lacklustre external demand as well as waning export competitiveness and called the outlook for domestic demand subdued.
The National Economic Social and Development Board, the planner, revised up its forecast for export growth this year to 2.9 percent from 2.4 percent.
Exports, a key growth driver, grew in 2016 for the first time in four years, but Thailand faces expected protectionism and capital outflow risks as the US Federal Reserve prepares to hike rates this year.
Kobsidthi Silpachai, head of capital markets research of Kasikornbank in Bangkok, said “it looks like we are still in a soft patch for growth.”
Structural issues “weigh on Thailand’s ability to reach potential growth in excess of four to five percent,” he said.
While government spending is at a “good clip”, this “does not seem to generate the crowding in from private investments,” he added.