# Realizing Higher Growth Potential in Thailand Through Bold Structural Initiatives and Reforms

- Link: https://www.thailand-business-news.com/economics/156629-realizing-higher-growth-potential-in-thailand-through-bold-structural-initiatives-and-reforms
- Published: 2024-08-21T09:18:00+07:00
- Author: News Desk

**Thailand’s economy is on the upswing, driven by strong private demand, a rebound
in tourism, and increased government spending. The growth forecast is 2.8% for 2024
and 3.4% for 2025.**

## Economic Developments and Outlook

Thailand’s economic momentum is driven by resilient private demand, tourism recovery,
and increased government disbursements. The ASEAN+3 Macroeconomic Research Office(
AMRO) forecasts growth strengthening to 2.8% in 2024 and 3.4% in 2025. Despite this,
structural reforms are necessary to avoid underperformance. The first quarter of
2024 saw weak government spending and exports, but private consumption and tourism
remained robust. Tourist arrivals are expected to grow from 28.3 million in 2023
to over 36 million in 2024, boosted by higher government disbursements following
April’s budget approval.

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## Risks and Challenges

Thailand faces significant short-term risks, including potential setbacks in exports,
private investment, government disbursement, and private consumption due to high
indebtedness. Inflation might rise as energy subsidies are withdrawn. Over the medium
to long term, public debt sustainability and a secular decline in growth potential
pose substantial challenges. Global digital and green transitions could impact export
competitiveness, especially for SMEs. Skill gaps and high labor informality limit
technological progress utilization, further complicating economic transformation
efforts.

## Policy Recommendations

Securing macro-financial stability and revitalizing structural transformations are
critical for Thailand’s long-term growth. Current monetary policies are appropriate,
supporting economic recovery while managing high household debt. Fiscal policies
should focus on consolidation for rebuilding fiscal space, with AMRO praising Thailand’s
Medium-Term Fiscal Framework revisions. Comprehensive revenue reforms are essential
to meet increasing infrastructure, aging population, and climate change expenditure
demands. Key areas for reform include fostering innovation, enhancing human capital,
and upgrading infrastructure, with a strong emphasis on executing development plans
and investment projects effectively.

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Source: [Thailand: Realizing Higher Growth Potential Through Bold Structural Initiatives and Reforms ](https://amro-asia.org/thailand-realizing-higher-growth-potential-through-bold-structural-initiatives-and-reforms)