19/05/2026

BIZ & FINANCE TUESDAY | MAY 19, 2026

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Thai first quarter GDP growth beats forecasts

China consumption, factory output rise at slowest pace in years BEIJING: China’s consumer spending and factory output grew at their slowest pace in years last month, official data showed yesterday, a stark sign of the challenges Beijing faces to reignite domestic activity. The world’s second-largest economy has struggled to mount a strong recovery since the Covid-19 pandemic ended, despite a historic boom in exports. Economists have long argued that China should shift towards an economic model led more by household spending than traditional drivers including exports and construction. Retail sales growth slid to just 0.2% in April compared to the same month last year, the National Bureau of Statistics (NBS) said yesterday. The figure represented the slowest increase since December 2022, when the country was reeling from an outbreak of Covid-19 infections after the abrupt scrapping of pandemic control policies. It missed a Bloomberg forecast of 2% in April based on a survey of economists. Industrial production also came up short of expectations last month, the official data showed, growing 4.1% year-on-year, down from 5.7% in March. That was the slowest increase in factory output recorded by the NBS since July of 2023. “The external environment remains complex and volatile,“ said NBS spokesperson Fu Linghui at a press conference following the data’s publication. “Domestically, the imbalance of strong supply and weak demand remains a prominent issue,“ he added. Monday’s data “sent a clear warning signal to those expecting a rebound in domestic demand”, Alicia Garcia-Herrero, Asia-Pacific chief economist at Natixis, told AFP. The country’s growth model “has bifurcated into two distinct trends: weakening domestic demand and a shining performance in high-tech products”, she said. “The export market appears to be the only way to make the system sustainable, at least in the short run.” A years-long crisis in the once-booming property sector has spooked consumers, though analysts say there have been signs of slight recovery in the real estate market in recent months. NBS data showed Monday that new home prices in a selection of 70 cities dropped at a slower rate in April than in previous months. Beijing is targeting overall economic growth this year of between 4.5% and 5% year-on-year, down from the 2025 target of around 5%. Official data released last month suggested that the economy was on track to meet that goal, though experts warn the full impact on China’s economy from the still-unresolved US-Israeli war on Iran has yet to be realised. Consumer prices increased in April as the cost of crude oil rose globally due to the war, the NBS said last week. However, analysts warn that deflationary pressure is still weighing on the Chinese economy. As domestic consumption slumps, exports from the manufacturing powerhouse have boomed, offering Beijing a key economic lifeline. The country recorded an unprecedented US$1.2 trillion trade surplus last year, with challenges in trade with the United States offset by booming shipments to other markets, including Southeast Asia. “Domestic headwinds look to have intensified last month, especially when it comes to construction activity,“ Julian Evans-Pritchard of Capital Economics wrote following yesterday’s data publication. “But with external demand picking up and the electronics sector in an upswing, we still think that China’s economy is on course to hold up well this year,“ he said. “All told, the April activity data are disappointing but not cause for alarm just yet,“ he wrote, adding that he anticipates growth remaining“resilient over the rest of the year”. – AFP

“There is room for fiscal policy to support growth,” Ekniti said, adding that debt-to-GDP ratio would reach 68% this year and 69% in 2028, still below the official ceiling of 70%. There will be more support for fertiliser and transport, he said. The NESDC also forecast that exports, a key driver of Thai growth, would grow by 9.6% this year, up from an earlier estimate of 2.0% growth. However, tourism, another key contributor to the economy, was expected to decline, with foreign arrivals forecast at 32 million arrivals this year, down from a February estimate of 35 million. Bank of Thailand Governor Vitai Ratanakorn said this month that growth was now expected to reach 2.1% this year, up from 1.5% projected at the last meeting, when the key interest rate was held steady at 1.00%. Last week, Ekniti said he expected growth to top 3% over the next one to two years, driven by new investments. Tim Leelahaphan, an economist at Standard Chartered, said the bank’s growth forecast for 2026 remained unchanged at 1.4%. “We see a slowdown ahead.. the effects of the Middle East conflict began to take hold,” he said in a note. The Thai economy expanded 2.4% last year, and has lagged regional peers since the pandemic. – Reuters

2.5% on the year and 1.9% on the quarter. The first-quarter growth was also driven by an expansion of manufacturing and government consumption, the NESDC said in a statement, adding that private consumption and investment also rose. However, unemployment rose to 0.91% over the period, up from 0.70% in the previous three months, the planning agency said. Exports and purchasing power will soften in the second quarter due to the war in the Middle East, Finance Minister Ekniti Nitithanprapas told reporters after the data was released. “Looking ahead, there are still storms forming, along with rising oil prices and higher inflation,” he said. For the whole of 2026, the agency said that the economy would be supported by increased private consumption, private investment and public expenditure, including the government’s borrowing plans. Earlier this month, the government approved a 400 billion-baht (RM49 billion) loan decree and it is planning to launch a consumer subsidy scheme in June to support the economy, which has been hit by the impact of the war in the Middle East and stubbornly high household debt. The loans will be used to ease living costs and support the energy transition.

BANGKOK: Thailand’s economy grew faster than expected in the first quarter of 2026, helped by higher exports, consumption and investment, official data showed yesterday, but the government has kept its outlook for the year unchanged as the war in the Middle East drags on. Southeast Asia’s second-largest economy will be supported by the government’s borrowing plan to alleviate cost of living challenges and support the clean energy transition, the National Economic and Social Development Council (NESDC) said. The economy grew by 2.8% in the January-March quarter from a year earlier, beating the median forecast of 2.2% in a Reuters poll, though the agency kept its full-year outlook unchanged at 1.5% to 2.5% for the full year. On a seasonally adjusted quarterly basis, the economy expanded 0.7% in the January March period, higher than the poll forecast of 0.1% growth. In the final quarter of 2025, growth was o Planning agency maintains outlook for 2026 at 1.5% to 2.5%

A boat sails past a container vessel docked at Pasir Pajang port terminal in Singapore yesterday. – AFPPIC

AI-related demand boosts S’pore exports in April SINGAPORE: Singapore’s exports rose nearly 25% in April compared to the same month the previous year as strong demand for AI-related products outweighed the effects of the Middle East crisis, official data showed yesterday. Non-oil domestic exports posted chips, key components in a diverse range of hardware, from laptops and smartphones to next-generation digital storage devices. Exports to the United States surged 59.6%, reversing a fall of 2.8% in March. The closure and a rival US blockade on maritime traffic to Iranian ports has jolted global energy markets and raised fears of a dampening in international economic growth as consumers grapple with rising prices.

The prime minister did not provide specific figures, but the Trade Ministry in February said it expected the economy to expand 2%-4% this year, a bump from its previous forecast of 1%-3 %. Wong urged Singaporeans to “be prepared for a more difficult period ahead”, but also added that government policies implemented in the past to build energy resilience, including turning the small nation into a major oil refining hub and energy trading centre, would help the country deal with the crisis from a position of strength. – AFP

Shipments to China climbed 37.8% from 20.3% the previous month and those to the European Union rose 33.4% after shrinking 12.2% in March. On May 1, Prime Minister Lawrence Wong warned that economic growth for the city-state will likely slow this year as the Middle East crisis keeps the Strait of Hormuz closed. Shipping through the strait, though which around a fifth of global oil and gas transits, has been largely blocked by Tehran since the US and Israel carried out the strikes on Iran that began the regional war on Feb 28.

forecast-beating 24.5% growth that extended the 15.3% rise recorded in March, said Enterprise Singapore, a government body helping local firms expand globally. As an export-oriented economy with a small domestic market, Singapore is usually seen as a bellwether for international trade. “Electronics (exports) continued to expand, supported by robust AI-related demand,“ Enterprise Singapore said. The rise highlights an insatiable global appetite for advanced artificial intelligence