Fitch Ratings, one of the world’s leading credit rating agencies, has recently revised its forecast for Thailand’s economic growth in 2023.

According to Fitch, Thailand’s gross domestic product (GDP) is expected to grow by 3.0% in 2023, down from its previous projection of 3.2%. This is lower than the average growth rate of 3.4% for the ‘BBB’ rated peers, and well below the Bank of Thailand’s forecast of 3.6%.

Rising inflationary pressures and slower global growth

The downward revision reflects Fitch’s view that Thailand’s economic recovery will be more modest than previously anticipated, due to the lingering effects of the Covid-19 pandemic, rising inflationary pressures, and slower global growth.

Fitch also notes that Thailand’s public debt ratio will remain elevated at around 56% of GDP by 2024, limiting the fiscal space for further stimulus measures.

Positive factors that could support Thailand’s growth

However, Fitch also acknowledges some positive factors that could support Thailand’s growth prospects in the medium term. These include the robust external position, the strong macroeconomic policy framework, and the gradual revival of inbound tourism.

Fitch expects tourist arrivals to reach about 24 million in 2023, or 60% of its pre-pandemic level. Fitch also affirms Thailand’s long-term foreign-currency issuer default rating at ‘BBB+’ with a stable outlook, indicating a low default risk and a high credit quality.

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