SCB EIC lowers Thai economic growth forecast for 2024 to 2.7% due to weak manufacturing sector, structural challenges, and anticipates policy rate cuts to sustain neutral monetary policy.
SCB EIC estimates a decrease in Thailand’s potential GDP growth to 2.7% for the long term (2024-2045), driven by declining total factor productivity and deepening structural challenges in the manufacturing sector.
The forecast includes two expected policy rate cuts by the MPC in April and June 2024 to sustain a neutral monetary policy stance and support economic growth while alleviating high debt burdens for vulnerable businesses and households.
SCB EIC has revised down the Thai economic growth forecast for 2024 to 2.7% due to a moderation in economic momentum and slow recovery in the manufacturing sector, impacted by structural challenges. Despite anticipated growth in demand factors such as exports and private investments, challenges persist with weakening momentum from the public sector and high inventory levels within the manufacturing sector hindering overall progress.
The manufacturing sector faces challenges on both the supply and demand sides, including higher penetration of imports, sluggish overseas demand, delays in budget acts, geopolitical risks, and high inventory levels. These factors contribute to a lower competitiveness in Thai exports and hinder the sector’s recovery trajectory, reflecting significant structural challenges within the industry.
