SCB EIC revised Thailand’s 2023 growth forecast to 2.6% due to lower-than-expected GDP and slow recovery of Chinese tourists. The Thai economy is expected to grow at 3.0% in 2024, with concerns about slow recovery and uncertainties from external and domestic factors. The report proposes four enhancing policies to address structural issues.
SCB EIC has adjusted its growth forecast for 2023 to 2.6% due to a lower-than-expected Q3 GDP outturn, a significant decrease in government spending, and lower tourist arrivals. The Thai economy is expected to continue growing in 2024 at a rate of 3.0%, driven by expansions in exports and private investment. However, growth may be slower than previously projected due to weaker economic momentum following a high growth of private consumption this year and a slower-than-expected recovery in household income.
Thai policy rate expected to remain at 2.5%
The Thai policy rate is expected to remain at the current level of 2.5% throughout 2024 to balance Thailand’s financial system and keep inflation within the target range. The Digital Wallet scheme may temporarily boost economic growth beyond its potential level, leading to increased inflationary pressures. In 2024, the global economy is expected to slow down to 2.5% due to monetary policy tightening among developed countries and pressures from structural factors in China.
Declining potential growth in the long term
SCB EIC is concerned about the Thai economy growing at a lower rate over declining potential growth in the long term, largely due to prolonged structural issues and the uneven recovery of households and businesses. To address these issues, SCB EIC proposes a set of “four enhancing policies” to boost immunity for households, enhance businesses’ competitiveness, adjust national investment strategies, and ensure sustainability of the Thailand’s real sector.
