Prolonged political uncertainty is a key risk for Thailand’s economic outlook, according to the World Bank’s Thailand Economic Monitor.

Lingering doubts about the cohesiveness of the newly established 19-party coalition government could adversely impact investor and consumer confidence and contribute to a further delay in the timely implementation of large public infrastructure projects, the report said.

On the external front, ongoing trade tensions between the US and China could further weaken demand for Thai exports and discourage private investment in export-oriented industries.

The World Bank, however, is maintaining its forecast for Thai economic growth this year at 3.5%. It also predicts that economic growth will gradually pick up to 3.6% in 2020 and 3.7% in 2021, assuming private consumption can be sustained and public investment accelerates.

“Policy continuity and the implementation of planned public infrastructure projects in the Eastern Economic Corridor will be of vital importance to sustain growth,” said Birgit Hansl, country manager for Thailand at the global lender. “Increased regional integration and making better use of Thailand’s strategic location could support trade in goods and services.”

Meanwhile, the Thailand Economic Monitor said Southeast Asia’s second-largest economy has made large strides in expanding access to financial services, as seen by the fact that 82% of Thai adults have a formal bank account and the gender gap is small.

But the report finds that challenges remain in the quality of digital financial services, as well as in access to broadband internet.

“Expansion of digital services to the under-served would bring about new economic opportunities and support a reduction of inequality as envisaged in Thailand’s national strategy,” said Kiatipong Ariyapruchya, the World Bank’s senior economist for Thailand.

“As fintech activities continue to grow in Thailand, inter-governmental collaboration and building a supportive environment for a sound fintech ecosystem would be important.”