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Thailand’s economy grew in line with economists’ estimates in the three months to December, dipping slightly on the previous quarter as the country mourned the death of the world’s longest-reigning monarch.

Gross domestic product grew 3 per cent, in line with a median estimate from economists compiled by Reuters. The Southeast Asian country had seen its GDP grow 3.2 per cent in the third quarter.

King Bhumibol Adulyadej died in October after a reign of 70 years. His son accepted the throne in December taking the name King Maha Vajiralongkorn Bodindradebayavarangkun.

The latest quarterly figure brought annual GDP growth to 3.2 per cent, a marked improvement from a recent nadir of 0.8 per cent in 2014.

Krystal Tan, Asia economist for Capital Economics, suggested lacklustre external demand and continued political uncertainty will keep growth from reaching its potential in 2017:

For a start, the export sector will be held back by lacklustre external demand as well as waning export competitiveness. The outlook for domestic demand is also subdued. High household debt will continue to constrain private consumption growth. Meanwhile, although calm has prevailed since the passing of King Bhumibol, the political situation remains highly uncertain ahead of elections next year. This, coupled with low capacity utilisation, will continue to weigh on the prospects for private investment.

Thailand’s government expects GDP to grow 3.6 per cent in 2017, with stronger global commodities demand boosting exports to growth of 3 per cent. In December exports grew 6.2 per cent from the previous year, bringing annual expansion of outbound shipments to 0.45 per cent and ending three years of contraction.

The Bank of Thailand earlier this month voted to hold interest rates at 1.5 per cent, where they have been since the last cut in March 2015.

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