The World Bank has lowered Thailand’s 2024 GDP growth forecast to 2.4% from 2.8%, due to weaker exports and public investment. However, private consumption, tourism, and export rebounds are expected to drive growth. Inflation is projected to slow to 0.7% in 2024, and public debt may rise to 64.6% in fiscal year 2025. The bank advises Thailand not to ease monetary conditions yet. The report also highlights the potential of Thailand’s secondary cities for future growth.
Revised Growth Forecast for Thailand
The World Bank has adjusted Thailand’s 2024 GDP growth forecast to 2.4% from 2.8%, citing weaker-than-expected exports and public investment early in the year. Despite this, the bank projects a GDP expansion of 2.8% in 2025, indicating potential economic improvement.
Factors Influencing Thailand’s Economic Growth
Thailand’s downgraded growth outlook primarily stems from sluggish exports. However, the World Bank anticipates private consumption and tourism to significantly contribute to the country’s GDP growth. The bank advises against monetary easing until the economic outlook clarifies, aligning with the central bank’s interest-rate policy over government calls for early easing.
The World Bank has recently downgraded Thailand’s economic growth outlook to 2.4% for 2022, a significant reduction from its previous prediction of 3.4%. This revision is primarily attributed to the decline in exports, which have been adversely affected by global supply chain disruptions and the ongoing Russia-Ukraine conflict.
Thailand, being a key exporter of goods such as automobiles and parts, computers, and rubber, has been severely impacted by the global economic slowdown. The country’s automotive sector, a significant contributor to its exports, has been particularly hard hit due to a shortage of semiconductors.
Moreover, the Russia-Ukraine conflict has further exacerbated the situation. Both countries are significant importers of Thai goods, and the conflict has disrupted trade flows. Additionally, the surge in commodity prices, particularly oil and gas, triggered by the conflict has increased production costs, thereby dampening the competitiveness of Thai exports.
The World Bank also highlighted that the recent COVID-19 resurgence in China, Thailand’s largest trading partner, has led to lockdowns and supply chain disruptions, further impeding Thailand’s export growth.
To mitigate these challenges, the World Bank recommends that Thailand focus on enhancing its domestic demand, promoting private investment, and accelerating vaccine rollouts to boost economic recovery. It also suggests implementing measures to improve the country’s resilience against future economic shocks.
Source : World Bank downgrades Thailand’s growth outlook to 2.4% due to declining exports
