Thailand’s economy grew by 3.2% in the fourth quarter of 2024, missing the forecasted growth of 3.9%. This growth rate, although lower than expected, is still the strongest annual rate in nine quarters.
Key Points
- Thailand’s economy grew by 3.2% in the fourth quarter of 2024, missing the forecasted growth of 3.9%, but still representing the strongest annual rate in nine quarters.
- The Thai economy faces potential risks from U.S. tariffs on its exports, which could impact its economic growth in 2025.
- The Thai government aims to stimulate the economy with measures targeting industries like automotive and real estate, and is optimistic about achieving 3.5% growth in 2024, despite concerns about high household debt and sluggish demand from China.
The slow growth is attributed to high household debt, borrowing costs, and sluggish demand from China. The full-year growth was 2.5%, faster than the 2.0% growth in 2023. The growth forecast for 2025 remains unchanged at a range of 2.3% to 3.3%.
The Thai economy faces potential risks from U.S. tariffs on Thai exports, as highlighted by the National Economic and Social Development Council (NESDC) head, Danucha Pichayanan. Despite the lower-than-expected growth, Danucha stated that there is no immediate need to cut interest rates. The Bank of Thailand left its main interest rate at 2.25% in December following a surprise quarter-point cut in October. The next policy review is scheduled for February 26.
Danucha emphasized the importance of monitoring global economic trends, particularly the impact of geopolitical tensions and trade policies, which could further strain Thailand’s export-driven economy. He also noted that domestic consumption and tourism remain critical pillars for sustaining growth, urging policymakers to focus on strengthening these sectors. Meanwhile, analysts suggest that the Bank of Thailand might adopt a wait-and-see approach in the upcoming policy review, balancing the need to support growth while ensuring financial stability.
