Despite strong electronics exports, BofA Securities says Thailand's domestic production growth has slowed, reflecting limited value-added activity.
The Thai economy is expected to miss the country's potential growth level of 2.5-3% over the next two years, says Bank of America (BofA), noting that the ongoing recovery remains "limited and uneven" while energy supply shocks and price volatility persist.In recent research by BofA Securities, the corporate and investment banking division of BofA reported that Thailand's economy has improved sequentially, but the recovery remained limited and uneven.
"Recent high-frequency data suggest the Thai economy improved sequentially in May after being hit by rising energy costs in April, although the recovery remained limited and uneven," BofA said in an Asean macro roundup jointly prepared by emerging Asia economist Pipat Luengnaruemitchai.
With year-on-year growth accelerating, the improvement was driven mainly by durable goods, particularly electric vehicle sales, while non-durable and semi-durable spending remained subdued. Weaknesses in automobiles and food and beverages outweighed modest growth in electronics-related output.
"Despite strong electronics exports, domestic production growth slowed sharply, highlighting limited domestic value-added. Meanwhile, the current account remained under pressure with a US$6.4-billion deficit," noted the report.
