The World Bank has revised down its forecast for Thailand’s GDP growth in 2024 to 2.4%, from the previous projection of 2.8%. This adjustment does not account for the potential impacts of the digital wallet initiative.
The Bank emphasizes the need for long-term economic measures to stimulate growth. Despite this, Deputy Finance Minister Paopoom Rojanasakul remains confident that the economy will grow by 3%, supported by various government stimulus measures.
Key drivers of Thailand’s economy in 2024 are expected to be private consumption and tourism. However, the overall growth rate will slow. The World Bank projects 36.1 million tourists to visit Thailand this year, with tourism returning to pre-pandemic levels by mid-2025.
For 2025, the Bank forecasts GDP growth of 2.8%, driven by increased domestic and international demand and higher government spending, with an estimated 41.1 million international tourists visiting Thailand.
Senior economist Kiatipong Ariyapruchya from the World Bank noted that Thailand’s economic recovery is sluggish, facing three main challenges: the global economic slowdown affecting trade, services, and tourism; inflation pressures; and structural issues in the economy.
He pointed out that despite some recovery signs, such as improved export orders in the first quarter of 2024, the Thai economy’s growth has been limited, particularly in export and tourism sectors which are yet to reach pre-pandemic levels.
Inflation remains a concern, with the current account balance turning positive but still vulnerable due to incomplete recovery in exports and tourism. The Bank of Thailand faces the challenge of managing inflation and economic growth, compounded by uncertainties surrounding the digital wallet project. Although diesel price subsidies have been removed, other energy subsidies may keep inflation volatile.
Deputy Finance Minister Paopoom Rojanasakul remains optimistic, projecting a 3% growth for Thailand’s economy in 2024. The government is preparing additional economic stimulus measures, including tax incentives and low-interest loans worth 100 billion baht from the Government Savings Bank. Efforts are also being made to expedite budget disbursements and support small businesses through credit guarantee schemes.
The minister also assured that the public debt, currently at 63% of GDP including the debt of state enterprises not guaranteed by the government, remains manageable, with the actual public debt levels at a low 57% of GDP. (TNA)
