(Feb 19): Thailand’s economy grew at a slower-than-expected pace in the fourth quarter (4Q), as weak global demand hurt exports and consumption likely suffered on account of lower spending by tourists.

Gross domestic product (GDP) in the three months through December rose 1.7% from a year earlier, the National Economic and Social Development Council said on Monday. That’s well below the 2.6% median growth estimate in a Bloomberg survey.

The economy shrank 0.6% quarter-on-quarter, against a median estimate for a 0.1% contraction. For the whole year, the economy grew 1.9%, slower than the 2.6% pace clocked in 2022.

The government has pushed for lower interest rates, as well as a US$14 billion (RM66.92 billion) cash handout to citizens to boost consumption in Southeast Asia’s second-largest economy. While the Bank of Thailand (BOT) has maintained that easing interest rates will depend on evidence of chronic economic weakness, Monday’s data builds the case for Prime Minister Srettha Thavisin to renew his calls for rate cuts.

Exports growth have remained stagnant in low single digits, while tourism — the only growth engine firing strong for now — has failed to deliver any significant boost to growth because of thrifty tourists. Although BOT governor Sethaput Suthiwartnarueput has previously flagged the declining levels of spending by foreign visitors in the tourism-reliant economy, high household debt levels are a deterrent to any premature easing of rates.