Thailand’s GDP is predicted to grow by 3.6% next year, driven by strong private consumption and a recovering labor market, according to the OECD.
Key Takeaways
- Thailand’s GDP is projected to grow by 3.6% in 2023 due to strong private consumption and a recovering labor market, supported by rising tourist arrivals.
- The OECD praises Thailand’s prompt policy response to the COVID-19 pandemic for cushioning the negative economic impacts, but highlights the need for bold reforms to ensure a solid and inclusive recovery.
- Thailand’s immediate challenges include phasing out pandemic support measures amidst high inflation and addressing the risks associated with its dependence on trade and investment flows, as well as global energy price fluctuations.
The second OECD Economic Survey of Thailand says that strong fiscal support has helped to avoid a sharp economic contraction during the pandemic but public debt has increased rapidly over the past years and fiscal consolidation should now continue at a gradual pace.
The Thai economy is projected to continue its gradual recovery, with real GDP expected to grow by 3.6% in 2024.
OECD Economic Surveys: Thailand 2023 | en | OECD
The organization highlights Thailand’s prompt response to the COVID-19 pandemic as a key factor in cushioning its economic impact. However, the OECD advises that bold reforms are necessary for a more solid and inclusive recovery, including addressing challenges related to an aging population, digital transition, global value chains, and the green transition.
Further policy action is crucial to support the convergence towards higher income levels, especially considering the declining working-age population. It is imperative to make stronger efforts in improving the business climate, embracing digital technologies, and fostering competition.
It also emphasizes the need for policy action to boost productivity, improve the business climate, adopt digital technologies, and expand trade agreements. The OECD warns of downside risks such as dependence on trade and investment flows and vulnerability to global energy price fluctuations.
This can be achieved by relaxing the remaining restrictions on market entry and foreign direct investment, particularly in the services sector, as well as expanding trade agreements to adapt to the changing patterns of global trade. Additionally, it is important to continue initiatives aimed at preventing and combating corruption.
