(Bloomberg) -- Thailand’s economy grew at the slowest pace in almost five years in the second quarter as exports and tourism deteriorated, buffeted by U.S.-China trade tensions and a strong local currency.

Gross domestic product rose 2.3% from a year ago, down from 2.8% in the second quarter, the National Economic and Social Development Council said Monday. That’s the slowest pace since the third quarter of 2014. The expansion was in line with the median estimate of 2.3% in a Bloomberg survey of economists.

A slowdown both domestically and abroad affected the quarter’s growth, Thosaporn Sirisumphand, secretary general of the council, said at a briefing in Bangkok. The U.S.-China trade war, global jitters and drought remain risks going forward, although a government stimulus package announced last week, as well as potential investment from companies relocating from China amid the trade war, could help offset the damage, he said.

Further stimulus is possible, including steps that focus on boosting private investment and tourism, Thosaporn told reporters. The government also will likely boost investment through public spending and disbursements by state enterprises, he said.

Key Insights

• The trade-reliant economy has been hit by a slump in exports and cooling tourist arrivals. A looming delay in the budget after a new government took office in July is another risk
• The council lowered the full-year growth forecast to 2.7% to 3.2%, compared with an earlier forecast of 3.3% to 3.8%. The forecast for exports was cut to 1.2% contraction, from previous estimates of 2.2% growth
• The second-quarter growth print should be the lowest this year, Deputy Secretary-General Wichayayuth Boonchit said at the council’s briefing Monday
• The Thai baht has gained nearly 8% in the last 12 months, making it Asia’s best performing currency tracked by Bloomberg. The central bank has taken a series of measures to curb short-term inflows and intervened in the foreign exchange market to limit the currency’s gains, leading to a record-high level of foreign exchange reserves

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• GDP rose a seasonally adjusted 0.6% in the second quarter compared with the previous three months, lower than the 0.7% median estimate in a Bloomberg survey
• The government announced 316 billion baht ($10.2 billion) economic stimulus package Aug. 16 to help boost local demand
• The central bank unexpectedly cut its benchmark interest rate earlier this month -- for the first time in more than four years -- and said it sees more room to ease as global risks surge

(Eearlier versions of this story were corrected to indicate the proper quarter’s data and proper time comparison.)

(Adds official comments in third and fourth paragraphs, details throughout.)

--With assistance from Tomoko Sato.

To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net

To contact the editors responsible for this story: Niluksi Koswanage at nkoswanage@bloomberg.net, Michael S. Arnold, Sunil Jagtiani

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