Thailand’s economic growth slowed in the third quarter, data released Monday showed, with the nation plunged into mourning following the death of its long-serving King Bhumibol Adulyadej. High household debt, weakening exports, slumping foreign investment and low consumer confidence have cramped growth in what for years was Southeast Asia’s flagship economy. A military junta seized power in 2014 vowing to end years of political instability and kickstart the lacklustre economy.
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Thailand’s growth has since picked up slightly, mainly off the back of ramped-up government spending and tourist arrivals, but it remains comparatively low compared with its neighbours.
The National Economic and Social Development Board said Monday the economy grew 3.2 per cent on-year in July-September, missing estimates and also down from 3.5 per cent in the previous quarter.
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Seasonally adjusted quarter-on-quarter growth was 0.6 per cent, down from a revised 0.7 per cent in the three months prior.
King Bhumibol’s death on 13 October after a seven-decade reign has left politically divided Thailand without a rare pillar of unity.
The arch-royalist generals ordered an initial month-long mourning period where entertainment and festivities were either halted entirely or told to tone down. The official mourning period will last a full year.
Analysts said the king’s death would likely hit growth, particularly in the country’s entertainment sector, while political uncertainty remains an issue.
“Although calm has prevailed since the death of the king last month, the political situation remains highly uncertain, and this will continue to hang over the outlook for private investment,” Krystal Tan, at Capital Economics said in a briefing note.
She added that ramped up government spending “should help guard against a sharper slowdown”.
Somprawin Manprasert, chief economist at Bangkok-based Bank of Ayudhya, told Bloomberg News: “The economy may face challenges with slowing tourist arrivals and subdued mood during the king’s mourning period.”
Bhumibol’s dwindling health coincided with a decade of political turmoil, which began when the military toppled prime minister Thaksin Shinawatra in 2006.
Years of competing street protests, short-lived governments and outbreaks of violence have followed, culminating in another coup in 2014 that toppled the administration of Thaksin’s sister Yingluck.
Bhumibol’s named successor, Crown Prince Maha Vajiralongkorn, has yet to attain his father’s popularity or unifying status.