Waning Domestic Spending Slows Thailand's Growth, ETF | ETF Trends

Thailand’s economic growth has slowed, meaning the near-term prospects for its exchange traded fund (ETF) could be dim.

The economy grew by a slower-than-expected 5.3%. Growth in the second quarter was expected to reach 5.8%, reports Suttinee Yuvejwattana and Shanthy Nambiar for Bloomberg.

It was the first time in a year that the economy had slowed. A decline in exports of rice and rubber wasn’t enough to offset a decline in domestic spending.

The lingering political uncertainty has caused investment prospects to fall by the wayside, as protests and court cases against the Prime Minister Samak Sundaravej has taken away consumer confidence.

The weaker growth means that the Bank of Thailand could be verging on its last interest-rate hike for this year. Policy makers meet on Aug. 27. In July, the country’s inflation hit a 10-year high of 9.2%.

If a weak export agenda and lower domestic demand continue, it could threaten the iShares MSCI Thailand Investable Market Index (THD). The fund is down 27.7% since its April 1 inception.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.