Finance Ministry watches Thai economy in Q3 for risk of technical recession
Macro
The Ministry of Finance is watching the Thai economy in the third quarter for the risk of entering a technical recession if quarter-on-quarter growth remains negative. Mr. Santitarn Sathirathai, assistant minister to the Ministry of Finance, said the Thai economy is facing three waves of shocks: the energy price crisis, surging inflation, and falling incomes and purchasing power. The third quarter is clearly being hit by the third wave. If third-quarter GDP contracts for a second consecutive quarter after the second quarter, the economy will immediately enter a technical recession, affecting confidence and potentially leaving economic scars, especially among SMEs, many of which could shut down. However, the economy is expected to recover more clearly in the fourth quarter thanks to tourism, with Thailand hosting major global events such as the IMF and World Bank meetings, expected to draw more than 15,000 participants, as well as the World Economic Forum and G-Summit. Measures to support consumption continue through the Thai Help Thai Plus programme under the emergency loan decree. In the second quarter, more than 50 billion baht entered the system, and more will be injected in the third quarter. At the same time, the government is accelerating investment and transition by using funds from the 400 billion baht decree, with the latter 200 billion baht portion aimed at stimulating the transition to a green economy and clean energy, while helping reduce electricity cost burdens for the public and businesses.
