Thai economic growth slowed to a seasonally adjusted 0.7 percent quarter on quarter in the second quarter. Year on year GDP grew by 5.3 percent, below the revised 6.1 percent in the first quarter.
The state planning agency raised its full-year growth forecast to 5.2-5.7 percent from 4.5-5.5 percent predicted in May due to healthy exports in the first half and an expected boost from government stimulus measures in the second half.
The underlying reasons for the slowdown have been the inflation situation together with the continuing political uncertainty, both factors which weigh on consumers and investment.
The National Economic and Social Development Board (NESDB) now expects inflation to hit a 10-year high of 6.5-7.0 percent in 2008, up from 5.3-5.8 percent forecast in May, but below a 7.5-8.8 percent projection by the Bank of Thailand in July.
Despite the slowdown it seems unlikely the Bank of Thailand will refrain from raising interest rates when it next meets on Aug. 27.
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