BANGKOK, July 31 — Thailand, which reported poor June economic data early this week, had risen in private consumption and investment during the month and will report growth for April-June from the previous quarter, the central bank said today.

Data from the Bank of Thailand (BOT) indicated that Southeast Asia‘s second-largest economy is still struggling to raise growth, though there were some positive indicators.

The BOT’s private consumption index for June rose 0.9 per cent from May, the biggest monthly increase since before May 2014, when the army seized power in a bid to end political unrest.

Thailand will report second-quarter growth data on August 17. Some private economists have suggested there could be a contraction from the first three months of the year, but the BOT said there was growth during the quarter.

However, the central bank acknowledged that exports — a key growth engine — could contract more in 2015 than the 1.5 per cent it has projected.

Any reduction in the export forecast “may affect GDP a little”, BOT senior director Roong Mallikamas told reporters. The central bank in June cut its full-year GDP growth forecast to 3.0 per cent from 3.8 per cent.

On Monday, the government reported that June exports tumbled at the steepest annual rate in more than three years and factory output fell the most in 15 months.

Low commodity prices

Domestic demand has been soft amid record-high household debt, while low commodity prices have hurt farmers’ earnings. The junta’s anti-corruption campaign has unintentionally slowed government spending, which economists say needs to be higher to lift growth.

Charnon Boonnuch, economist at Tisco Securities, said private consumption will improve slightly, but it will not be significant enough for the slowing economy as purchasing power remains weak while household debt shows no clear signs of abating.

This week, the Finance Ministry said exports could fall as much as 4.0 per cent this year although it expected a weaker baht to boost shipments in the final months.

In January-March, the economy expanded 0.3 per cent from the previous three months and 3.0 per cent from a year earlier.

The central bank’s monetary policy committee left the policy rate unchanged at 1.50 per cent in June after surprisingly cutting at two meetings to try to spur growth. It next reviews policy on August 5.

Recent poor economic data has raised speculation of more interest rate cuts. But Finance Minister Sommai Phasee said this week that easing monetary policy now wouldn’t help the economy given weak private investment and demand. — Reuters