# World Bank lowers Thailand’s economic growth to 2.8%

- Link: https://www.thailand-business-news.com/economics/134277-world-bank-lowers-thailands-economic-growth-to-2-8
- Published: 2024-04-02T19:50:46+07:00
- Author: Olivier Languepin

The World Bank predicts that Thailand’s economic growth will be 2.8% this year, 
lower than previously expected, due to weak exports and a delayed budget.

 * Thailand’s economic growth is expected to be 2.8% in 2024, lower than previously
   forecasted, due to weak exports and a delayed budget.
 * Tourism and private consumption are projected to be key drivers of growth, with
   tourist arrivals expected to reach 90% of pre-pandemic levels.
 * The government is planning a 500 billion baht handout to 50 million Thais through
   a “digital wallet” scheme, which could potentially add 1% to economic growth 
   but also increase public debt.

**Tourism and private consumption** are expected to be key drivers of growth, with
tourist arrivals projected to reach **90% of pre-pandemic levels** this year. The
Thai government aims to welcome a record **40 million foreign visitors** in 2024,
following the reception of 28 million visitors in 2023.

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Additionally, Prime Minister Srettha Thavisin’s proposed **$14 billion handout**
to 50 million Thais through the “digital wallet” scheme could potentially contribute
an additional **1% to growth**, although it may also increase public debt

[Last week, The World Bank has published its Systematic Country Diagnostic (SCD) Update for Thailand](https://www.thailand-business-news.com/economics/134066-world-bank-report-highlights-challenges-and-opportunities-facing-thailand),
outlining **five reform priorities **for the country to boost growth during a sustained
economic downturn.

The priorities include building strong human capital, fostering a competitive and
innovative economy, unlocking growth in secondary cities, ensuring sustainable and
climate-resilient development, and strengthening fiscal institutions and public 
finance.

The report **[emphasizes the need for Thailand to improve education outcomes](https://www.thailand-business-news.com/opinion/100063-addressing-the-poor-quality-of-thailands-education-system)**,
enhance tech competitiveness, promote sustainable practices, and address challenges
posed by [climate change](https://www.thailand-business-news.com/environment/128336-thailand-ranks-as-third-country-most-exposed-to-climate-change-economic-losses).

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In addition to the factors mentioned earlier, there are other elements influencing
Thailand’s economy:

 1. **Global Supply Chain Disruptions**: The ongoing global supply chain challenges,
    including shortages of raw materials and shipping delays, impact Thailand’s manufacturing
    and export sectors. These disruptions can hinder production and affect trade flows.
 2. **Labor Shortages**: The pandemic has led to labor shortages in certain industries,
    affecting productivity and output. Sectors like agriculture, construction, and 
    hospitality have faced difficulties due to reduced workforce availability.
 3. **Tourism Dependency**: While tourism is a significant contributor to Thailand’s
    economy, it also makes the country vulnerable to external shocks. Any fluctuations
    in international travel, travel restrictions, or health crises directly impact 
    tourism revenue.
 4. **Political Uncertainty**: Thailand has experienced political instability in recent
    years, with frequent changes in government and policy direction. Uncertainty can
    deter foreign investment and affect business confidence.
 5. **Debt Levels**: High public debt and corporate debt pose risks to economic stability.
    Managing debt levels while stimulating growth remains a delicate balance for policymakers.
 6. **Climate Change and Natural Disasters**: Thailand is susceptible to natural disasters
    such as floods, droughts, and tropical storms. These events disrupt economic activities,
    damage infrastructure, and affect livelihoods.
 7. **Digital Transformation**: Accelerating digitalization and embracing technology
    can enhance productivity and competitiveness. However, ensuring equitable access
    to digital infrastructure remains a challenge.
 8. **Income Inequality**: Addressing income disparities and promoting inclusive growth
    are essential for long-term economic stability. Focusing on education, healthcare,
    and social safety nets can help reduce inequality.

The SCD Update was developed in consultation with various stakeholders and aims 
to support Thailand’s transition towards greater economic prosperity and environmental
integrity.