The World Bank predicted a modest economic growth of 2.8% for Thailand in 2024, with an acceleration of 3.0% in 2025. This forecast announced today, April 1, is underpinned by the nation’s struggling exports and a postponed budget.
This projection for 2024 and 2025 marks a decrease from the previously estimated figures of 3.2% and 3.1%, respectively, set in December. Thailand, which holds the position of being the second-largest economy in Southeast Asia, saw a growth of 1.9% in 2023 but experienced an unexpected contraction of 0.6% in the last quarter of 2023, compared to the third quarter.
Following the same trend, the Bank of Thailand also downgraded its growth forecast for 2024 to a range of 2.5% to 3.0% from the initial 3.2% in February. The rationale behind this reduction is attributed to the slackening global trade and the delay in the budget, which in turn has decelerated government spending, as explained by the World Bank’s Senior Economist, Kiatipong Ariyapruchya, during a virtual press conference.
The World Bank, in its statement, also pointed out that the dim prospects for exports and public investment contributed to the revised outlook. Meanwhile, the shippers’ council has projected an export growth of 1% to 2% for the current year.
The World Bank further identified tourism and private consumption as the pivotal factors propelling growth, with tourist arrivals expected to reach 90% of pre-pandemic levels this year. The government has set a target of attracting a record 40 million foreign visitors in 2024, a significant jump from the 28 million visitors in 2023.
Prime Minister Srettha Thavisin has described the current economic situation as a “crisis” and emphasised the need for a substantial fiscal stimulus. To address this, the government has proposed a 500 billion baht handout to 50 million Thais, a cornerstone policy that has been delayed.
The implementation of this ‘digital wallet’ scheme could potentially add 1% to the growth, but it’s also likely to increase public debt, stated Kiatipong, reported Bangkok Post.
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