### 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.
Thailand's economy grew at a slower pace in the second quarter due to weak exports and slower investment, prompting the government to lower its 2023 growth forecast, while the central bank may not raise rates again amidst faltering economic recovery and low inflation.
Hong Kong's exports continue to decline for the 15th consecutive month, with a 9% decrease in July, due to trade contraction with mainland China, the US, and Europe, affecting the city's economic recovery and prompting a downgrade in GDP forecast.
Thailand's tourism and exports, particularly in the chemical and plastic sectors, are expected to decline due to the economic slowdown in China caused by the real estate crisis, leading to a significant decrease in the number of Chinese tourists visiting Thailand and affecting the country's overall economy.
Vietnam's exports have declined for the sixth consecutive month due to weaker global demand and China's deteriorating economic outlook, posing a risk to the country's GDP growth target.
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.
If China were to slip into a deflationary spiral like Japan in the 1990s, it could lead to a decrease in consumer spending, a weakened economy, and negative consequences for the rest of the world, including a slowdown in imports for the US and adverse effects on developing economies reliant on Chinese exports and investment.
The global economy is expected to slow down due to persistently high inflation, higher interest rates, China's slowing growth, and financial system stresses, according to Moody's Investors Service, although there may be pockets of resilience in markets like India and Indonesia.
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.
Asia stocks fall as weak economic data in China and Europe raise concerns over global growth, while the dollar strengthens as investors assess the outlook for U.S. interest rates.
China's exports have declined for the fourth consecutive month due to weak demand at home and abroad, adding to the country's economic challenges caused by the property crisis and low consumer spending.
Several international financial institutions have lowered their growth forecasts for China's economy below the government's target due to weak exports and a property crisis, posing a challenge despite Beijing's optimistic rhetoric.
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.
Big Japanese manufacturers and the services sector in Japan are experiencing a decline in confidence, with concerns of a slowdown in China's economy affecting global and domestic growth, according to a Reuters poll. The weak sentiment in the business sector raises doubts about the ability of exports to drive economic recovery amid weak domestic demand. Many companies cited high input costs and weak demand as contributing factors, along with geopolitical risks and tensions between the US and China.
Singapore's annual exports fell for the 11th consecutive month in August, declining by 20.1% as the trade-dependent economy struggles with global headwinds and declining demand, indicating that export stabilization is not yet within reach.
Britain's main manufacturing trade body has lowered its growth forecast for the sector due to a decline in factory output and economic uncertainty, with expectations of a 0.5% fall in output in 2023 and a growth of only 0.5% in 2024.
Asia-Pacific markets are expected to continue declining as investors wait for China's loan prime rates and the U.S. Federal Reserve's rate decision, while oil prices rise due to supply concerns and all 11 sectors in the S&P 500 trade down.
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.
Japan's exports to China declined for the ninth consecutive month in August, dropping 11%, due to weak demand and the suspension of seafood imports following the Fukushima Daiichi nuclear plant incident.
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.
Summary: The U.S. stock market had a bad quarter, with all indexes falling, while the World Bank lowered its growth forecast for developing economies in East Asia and the Pacific, and China's demand for commodities continues to grow despite the downgrade. Additionally, a last-minute spending bill was passed to avoid a government shutdown, and this week's focus will be on the labor market.
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.
GDP growth in developing East Asia-Pacific is projected to be the worst in almost 50 years, with the region expected to grow by only 4.5 percent in 2024 due to persistent domestic difficulties in China and external factors.
The World Trade Organization has revised its forecast for global trade growth, halving its estimate due to rising interest rates and various economic challenges, with a particular impact on iron, steel, office equipment, textiles, and clothing. The slowdown in trade has raised concerns about the potential negative impact on living standards worldwide, particularly in poor countries.
The ASEAN+3 Macroeconomic Research Office has revised Vietnam's 2023 growth forecast to 4.7%, but it falls below other organizations' projections.
Most Japanese companies expect a continued slowdown in China's economy until 2025, with many looking to shift production to other markets, according to a Reuters poll, despite recent signs of recovery in China's economic activity.
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.
Japan's economy is vulnerable to China's economic downturn due to a lasting deceleration in Chinese growth, geopolitical tensions, and intellectual property theft from Japanese firms in China, leading to a reduction in exports and negative GDP growth in Asia.
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.
Shares fall in Asia and US futures also decrease after China reports a slowdown in its economy due to weak global demand for exports and a struggling property sector.
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.
Most Asian stocks continue to decline due to weak business activity in Japan and Australia, although Chinese markets rebounded as a state-run fund started buying equities; sentiment remains weak due to concerns over the Israel-Hamas war.
