Thailand's economic growth decelerated in the second quarter on weak investment and consumer spending, forcing the government to lower its growth projections for this year.
Gross domestic product rose 2.8 percent year-on-year in the second quarter, following the revised 3.0 percent growth in the previous three months, figures from the National Economic and Social Development Board showed Monday.
The second quarter growth rate came in line with expectations. In the fourth quarter, the economy had expanded 2.1 percent.
The government lowered its growth forecast for 2015 to 2.7 percent to 3.2 percent from the prior estimate of 3 percent to 4 percent. In the first half of the year, GDP advanced 2.9 percent.
The agency projected exports to shrink 3.5 percent instead of 0.2 percent rise expected earlier.
Against a backdrop of high household debt, a recent drought and waning export competitiveness, Krystal Tan, an economist at Capital Economics, sees little scope for faster growth in the coming quarters.
On a sequential basis, GDP increased a seasonally adjusted 0.4 percent in the second quarter, slightly faster than the 0.3 percent rise in the previous quarter.
In terms of production, annual fall in agricultural output steepened to 5.9 percent in the second quarter from 4.7 percent in the first quarter, while the output growth in non-agricultural sector eased to 3.5 percent from 4.1 percent.
Within in non-agricultural sector, manufacturing was down 0.7 percent, while the service sectors expanded especially in hotels and restaurants, transports and telecommunications.
On the expenditure side, investment growth fell sharply to 2.5 percent following the 10.7 percent growth in the previous quarter. Private consumption growth eased to 1.5 percent from 2.4 percent.
On the other hand, the growth in government spending improved to 4.6 percent from 3.3 percent, while that in exports of goods and services remained unchanged at 1 percent. At the same time, imports fell 0.3 percent after rising 2.3 percent in the previous quarter.
The Bank of Thailand kept its interest rate unchanged at 1.50 percent, the lowest since June 2010. The bank observed increased downside risks from a slowdown in the Chinese economy and the adverse impact of domestic drought.
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