Thailand: Inventory payback weighs on growth - ANZ

Analysts at Australia and New Zealand Banking Group (ANZ) offer their quick reaction Thailand’s Q3 GDP report released earlier this Monday.

Key Quotes:

“Thailand’s GDP expanded by 2.4% y/y in Q3, a marginal improvement from the 2.3% recorded in Q2, but still below market expectations.

We are nudging down our growth forecasts to 2.6% and 3.0% (previously 2.9% and 3.3%) for 2019 and 2020 respectively following today’s weak outturn, which brought average growth in the first three quarters of 2019 to just 2.5% y/y.

A drawdown in inventories was a key drag on Thailand’s growth in Q3. Final domestic demand improved slightly, while net exports were a positive contributor to growth.

The bottom line is that Thailand’s growth has bottomed and a gradual recovery should follow. The BoT’s 25bp cut at its 6 November meeting likely marked the end of its easing cycle.”