Thailand’s economic growth likely slowed sharply in the second quarter, while the economy contracted on a quarterly basis, a Reuters poll of economists showed, as subdued household consumption offset support from exports and private investment.

Economic Growth Slows

Southeast Asia’s second-largest economy likely expanded 1.7% in the April-June quarter from a year earlier, slowing from 2.8% growth in the previous quarter, according to the median estimate in an August 7-12 poll of 15 economists.

Forecasts for data, due on August 17, ranged from 0.9% to 2.2%. On a seasonally adjusted quarter-on-quarter basis, gross domestic product (GDP) was expected to contract 0.6%, according to the median estimate of a smaller sample of economists.

Private consumption was likely to be the main drag. The oil shock rippled through costs across a wide range of goods and services, especially transportation. As a result, households have likely grown more cautious about spending, said Eugene Tan, associate economist at Moody’s Analytics.

High household debt and an ageing population were also expected to constrain consumer spending despite government fiscal measures aimed at supporting demand, economists said.

Tourism, a vital pillar of Thailand’s economy, was also unlikely to provide much relief. Foreign arrivals were down 3.2% year-on-year as of August 1, limiting the sector’s ability to offset weak domestic demand.

Still, private investment, particularly in electronics and artificial intelligence infrastructure, was expected to cushion the slowdown. Exports were also likely to support growth, although economists said the boost could fade in the second half after shipments were front-loaded earlier in the year.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.