Thailand records current account deficit of US$7.6 billion in April

[BANGKOK] Thailand recorded a current account deficit of US$7.6 billion in April, with economic growth slowing from the previous month due to the impacts of the Middle East war and expected to get weaker, the central bank said on Friday (May 29).

Tourist arrivals and spending weakened and private consumption fell as a result of lower spending on consumer goods and fuel, with higher energy prices raising the cost of living, the central bank said in a statement.

Headline inflation turned positive, driven by higher domestic petrol and diesel prices. Core inflation rose as energy costs were passed through into food and public transport prices, it said.

Merchandise exports excluding gold increased, supported by strong growth in technology products and auto exports.

Manufacturing production remained broadly stable and conflict-related supply disruptions remained limited, it said.

Key issues to monitor include Middle East conflict developments, potential US trade policy changes, El Nino conditions and government economic stimulus measures, the central bank said.

Thailand’s first-quarter GDP growth beat forecasts, but the state planning agency last week maintained its 2026 outlook at 1.5 per cent to 2.5 per cent given the impacts of the Middle East war.

Earlier this month, Bank of Thailand Governor Vitai Ratanakorn said he expected growth of 2.1 per cent this year, up from 1.5 per cent projected at the last policy meeting in April, when the key interest rate was held steady at 1.00 per cent.

Manufacturing production dropped 0.36 per cent year on year in April due to the impact of the war, the industry ministry said on Thursday.

On May 19, the Cabinet approved new borrowing of 200 billion baht (S$7.83 billion) to finance a consumer subsidy scheme, part of a wider 400 billion baht loan decree to mitigate the impact of the war in the Middle East. REUTERS