The Thai stock market saw a sharp decline on Wednesday after the Bank of Thailand released a dim outlook for the Thai economy in December last year that could potentially lead to a revised down in the GDP for 2023.
The main bourse of Thailand was mostly in negative territory from start to finish on Wednesday, falling as much as 1% during the session to 1,359.54 points.
Concerns over the dire economy of Thailand in 2023 that could continue into 2024 weighed heavily on investors, while the upcoming Federal Reserve meeting in the US also prevented traders from making reckless moves ahead of the decision.
The Bank of Thailand (BOT) published a statement on Wednesday, stating that the Thai economy slowed down from the previous quarter as tourist expenditures and the value of merchandise exports, excluding gold, softened. This was due to the subdued global demand together with structural factors, which negatively affected manufacturing production and private investment.
Meanwhile, public spending also contracted from capital expenditures of the central government as well as investment from state-owned enterprises. Nevertheless, private consumption and activities in the service sector continued to improve and remained to be the key driver of the Thai economy.
The spokesperson of BOT said that the central bank could revise the estimation of Thai GDP in 2023 down from 2.4%, but did not elaborate whether the economic growth could be lower than 2% or not.
Last week the Thai Fiscal Policy Office also cut the growth forecast for 2023 to 1.8%, causing panic in the market at that time. Still, the International Monetary Fund (IMF) just published its new economic outlook yesterday and expected the Thai economy to grow 2.5% in 2023, while a significant growth will be visible in 2024 at 4.4%.
