Thailand’s economic growth is facing a challenging road ahead, with the World Bank revising its growth outlook for the country. The latest projections suggest a growth rate of 2.8% for this year, a downgrade from the previously forecasted 3.2%. The downward revision is attributed to weak exports and a delayed budget, hampering the country’s economic recovery.
In 2023, Thailand’s economy expanded by a modest 1.9%, but it unexpectedly shrank by 0.6% in the final quarter of the year. The central bank also adjusted its 2024 growth forecast to a range of 2.5% to 3.0%, down from the initial 3.2% estimate.
The slowdown in global trade and the delayed government budget have been major factors contributing to the revised outlook. The World Bank’s Senior Economist, Kiatipong Ariyapruchya, emphasized that dimmer export and public investment prospects have also played a role in shaping the new forecast.
Despite these challenges, Thailand is looking towards tourism and private consumption as key drivers of growth. Tourist arrivals are projected to reach 90% of pre-pandemic levels this year, with the government aiming for a record 40 million foreign visitors, up from 28 million in 2023.
Prime Minister Srettha Thavisin has recognized the gravity of the situation, describing the economy as being in a “crisis” and advocating for a major fiscal stimulus. His government’s delayed signature policy, a $14 billion handout to 50 million Thais through a ‘digital wallet’ scheme, could potentially boost growth by 1%, according to Kiatipong. However, this would come at the cost of increasing public debt.
While Thailand’s economy is expected to face challenges in the short term, the government’s stimulus measures and the gradual recovery of key sectors like tourism could help spur growth in the coming years.
(Source: Bangkok Post)
