Thailand’s Q2 2023 GDP growth of 1.8% year-on-year was weaker than expected, leading to a lowered growth forecast for the year from 3.0% to 2.8%.

Key Takeaways

  • Thailand’s Q2 2023 GDP growth of 1.8% was much weaker than expected, leading to a downward revision of the 2023 growth forecast to 2.8% due to high interest rates, political uncertainty, and weak external demand.
  • Tight credit conditions, elevated household debt, and higher interest rates will weigh on domestic activity and consumption in Thailand, hindering economic growth.
  • While Thailand’s tourism industry shows signs of recovery, the country’s economic rebound will remain lackluster due to ongoing challenges such as tight credit conditions, political uncertainty, and weak global demand.

The country faces challenges from high interest rates, political uncertainty, and weak external demand. However, the tourism sector’s recovery is expected to provide some relief. Tight credit conditions, political developments, and a slowdown in the global economy are all factors contributing to the economic slowdown.

On the positive side, Thailand’s tourism industry is expected to continue picking up and could reach pre-pandemic levels by early 2024. There are upside risks to the growth forecast if global growth outperforms expectations and if the tourism sector surprises with a stronger performance.

Thailand’s economic recovery softened in Q223.

Official data released on August 21 showed real GDP growth edged down from 2.6% y-o-y in Q123 to 1.8% in Q223. This was significantly below the consensus estimates of 3.1% and our growth projections of 2.9%. Further underscoring the extent of the slowdown, the economy expanded by a weak 0.2% on a seasonally adjusted quarter-on-quarter basis. In light of the latest growth figures and still-challenging economic conditions, we have lowered our full-year growth forecast from 3.0% to 2.8% in 2023, which is below both consensus expectations of 3.6% and the 2010-2019 average of 3.6%. 

This commentary is published by BMI, a Fitch Solutions company, and is not a commentary on Fitch Ratings' credit ratings.

Thailand’s 2023 Growth Revised Down Amid Disappointing Recovery (

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