### Summary
Thailand's economy grew slower than expected in Q2 2023, with tourism offsetting weaker exports due to global demand slowdown.
### Facts
- 💼 Thailand's economy expanded by 1.8% in Q2 2023, lower than the expected 3.1% growth.
- 📉 The government revised its GDP growth forecast for 2023 to 2.5% to 3.0%, down from the previous range of 2.7% to 3.7%.
- 📊 Q2 GDP rose by 0.2% on a quarterly basis, below the forecasted increase of 1.2%.
- 🌐 Thailand's economy has been supported by the tourism sector and private consumption growth amid weak global demand.
- 📉 Exports, a key driver of growth, have contracted since October 2022, primarily due to China's slowdown as its major trading partner.
China's economy, which has been a model of growth for the past 40 years, is facing deep distress and its long era of rapid economic expansion may be coming to an end, marked by slow growth, unfavorable demographics, and a growing divide with the US and its allies, according to the Wall Street Journal.
Thailand's economy grew at a slower-than-expected pace in Q2 2023 due to weak exports and slower investment, prompting the government to downgrade its 2023 growth forecast to 2.5-3.0%, leading to speculations that the central bank may not raise rates again this year.
Malaysia's economic growth in the second quarter of 2023 was the slowest in nearly two years due to sliding exports and a global slowdown, prompting the central bank to warn of lower full-year growth and the possibility of the target being hard to reach.
The number of people living in extreme poverty in developing Asia has increased by 67.8 million due to the COVID-19 pandemic and rising living costs, with more than 155 million people living on less than $2.15 a day last year, according to the Asian Development Bank.
China's economic slump, including a real estate crisis and high youth unemployment, coupled with rising tensions with the West, could lead to deflation and sluggish growth that could spread to the rest of the world, impacting global GDP growth and potentially causing a new normal of slower economic growth.
Forecasters have decreased their growth expectations for China due to deflation, rising youth unemployment, and a property-market crisis, with GDP predicted to rise by only 5.1% in 2023 and 4.5% in 2024.
China's economy will struggle with low growth under 5% through 2024, leading to a "structural hard landing" due to tight monetary policy, disappointing economic reopening, and challenges in real estate and stock markets, according to TS Lombard strategists.
The prospect of a prolonged economic slump in China poses a serious threat to global growth, potentially changing fundamental aspects of the global economy, affecting debt markets and supply chains, and impacting emerging markets and the United States.
Forecasts for China's economic growth in 2023 and 2024 have been cut, potentially hindering the country's goal of becoming a "medium-developed country" by 2035 and surpassing the US as the world's No.1 economy.
Policymakers expect slower growth in China, potentially below 4%, as the country transitions to a consumption-driven economy, which could have a negative impact on the global economy and alleviate inflationary pressures.
Asia experienced the largest decline in its ultra-high-net-worth population in 2022, with a 10.9% drop attributed to factors such as China's Covid lockdown and the war in Ukraine, while India was the only country to see a rise in its ultra wealthy individuals, according to a report by data firm Altrata.
China's economy is expected to grow less than previously anticipated due to struggles in the property market, leading economists to predict further downgrades and posing risks to both the domestic and global economy.
The Asian Development Bank has lowered its growth forecast for developing Asia due to high interest rates and the property crisis in China, posing risks to the region's economies.
The Asian Development Bank has lowered India's GDP growth forecast for FY 2023-24 to 6.3% due to the impact of extreme rainfall patterns on agriculture, while maintaining a growth projection of 6.7% for FY 2024-25, citing corporate profitability and strong bank credit as key factors. Additionally, the bank expects inflation to moderate and retail sales to be affected by food inflation, while India's external trade is expected to be affected by weak global demand. Despite these challenges, India's GDP growth outlook remains higher compared to its Asian peers.
The growth forecasts for Malaysia, the Philippines, Singapore, and Thailand have been downgraded due to declining exports to China and other factors, according to a survey by the Japan Center for Economic Research and Nikkei.
The World Bank has lowered its growth forecast for developing East Asia and the Pacific, citing a sluggish China, dampened trade, and high debt levels as factors contributing to the downgrade.
China's growth is expected to slow down in 2024, with the World Bank attributing the gloomy outlook to a slowdown in China, weak indicators, stagnant house prices, increased household debt, and trade tensions with the US.
China is facing a "grinding" economic slowdown with a narrow path for policymakers to prevent further decline, as its property sector and growth rate enter into structural decline and stimulus measures can only partially offset the weakening consumption and investment. However, it is unlikely to experience a Japan-like stagnation but rather a "Sinification" scenario with 3%-4% GDP growth over the next few years.
China's economic growth this year may be as low as 2 percent, half of what the International Monetary Fund predicts, due to problems in the property sector, weak foreign direct investment, and other structural issues, according to Daniel Rosen of the Rhodium Group. The IMF has forecasted 5.2 percent growth for China, but Rosen believes growth above 3 percent is unlikely in the medium term. Additionally, concerns are rising that China's economic challenges could hinder global growth.
China's economic malaise is attributed to a failure to implement necessary reforms, with structural threats to stability increasing and growth expectations diminishing, according to a report by Rhodium Group and the Atlantic Council, which warns that the country's goal of becoming the world's largest economy may be delayed.
The US economy is predicted to slow down by mid next year, which will have a negative impact on global GDP, according to Neelkanth Mishra, Chief Economist for Axis Bank. Mishra also mentioned that China will grow slowly but not collapse, while India will be affected through various pathways such as a decline in services growth, goods demand, dumping of products, and financial market volatility. However, he believes that India's trajectory looks good in the next 5-7 years.
The ASEAN+3 Macroeconomic Research Office has revised Vietnam's 2023 growth forecast to 4.7%, but it falls below other organizations' projections.
China's weak economic recovery and the risks associated with its property crisis are likely to impact Asia's economic prospects, according to the International Monetary Fund (IMF), leading to a cloudier outlook for the region and potential spillover effects on commodity-exporting countries with close trade links to China. The IMF revised its growth estimate for Asia down to 4.2% for 2024, and emphasized the need for central banks in the region to exercise caution in cutting interest rates due to sticky core inflation and other global factors such as the Middle East conflict. Additionally, the IMF warned that Japan's normalization of monetary policy could have significant global implications.
China's economic growth forecast for next year has been downgraded by the World Bank due to persistent difficulties such as elevated debt, property weakness, and an aging population.
Chinese GDP growth beats forecasts at 4.9% in Q3, retail sales and industrial output for September also surpass expectations, but concerns over widening conflict in the Middle East and the Gaza hospital blast overshadow positive economic data.
The IMF downgraded its growth forecasts for China, citing a weakening property sector and expects China's GDP to decline by as much as 1.6% relative to the baseline by 2025, while world GDP would decline by 0.6%.
China's economic growth forecast for next year has been downgraded by the World Bank due to the ongoing slowdown in the country's real estate market, which is expected to put pressure on global growth.
China's real estate market is declining, debt deflation is a concern, its workforce is shrinking, and GDP growth is slowing, leading to warnings of "Japanisation" and prolonged economic malaise, worsened by President Xi Jinping's autocratic rule and economic imbalances far worse than Japan's in 1990.
