World bank and ADB downgrade Thai GDP growth predictions for 2024
The economic forecast for Thailand in 2024 is uncertain as the World Bank reduces the country’s GDP growth estimate from 3.4% to 2.5%. Factors influencing this include weak exports and fiscal consolidation. Furthermore, the Asian Development Bank (ADB) also downgraded its Thai GDP growth prediction from 3.5% to 2.5% for the same reasons. Looking towards 2024, GDP is expected to grow by 3.2%, a decrease from the previously predicted figure of 3.5%.
In the tourism sector, a key growth driver, recovery to 2019 levels is anticipated by mid-2025, with the slow return of the Chinese market. The Tourism Authority of Thailand (TAT) aims to achieve a revenue target of 2.56 to 3.04 trillion baht (US$74 to 88 billion) to in 2024. To achieve this, the TAT plans to encourage airlines to increase flights and attract more tourists from potential markets, including China and India, reports Bangkok Post.
The Fiscal Policy Office (FPO) projects that economic growth will increase to 3.2% in 2024, up from 2.7% this year, supported by exports. The export sector is showing signs of recovery, with shipment values expected to expand by 4.4% in 2024. However, external challenges for the coming year include the risk of a global economic recession, conflicts in Ukraine and Israel, and worsening US-China relations.
The export sector is predicted to grow by approximately 2% in 2024, from an estimated decrease of 1 to 1.5% this year. The Thai National Shippers’ Council (TNSC) expects outbound shipment growth of 1-2% in 2024, totalling 9.8 to 9.9 trillion baht (US$287 to 289 billion). However, shippers face challenges in 2024, including a slowing global economy, anticipated drought, and high worldwide interest rates.
The Bank of Thailand is expected to maintain its policy rate unchanged at 2.5% throughout 2024. This rate will be maintained for an extended period, in line with the country’s ongoing recovery.
Equity investors are hopeful for a rebound in the Thai bourse in 2024, following a poor performance in this year. This is due to the US Federal Reserve’s indication of cutting interest rates three times in the next year, reducing the risk of a US recession.
Electricity bills are predicted to remain high in 2024, primarily due to high fuel costs. However, prices are not expected to be as high as they were in 2022.
The Eastern Economic Corridor (EEC) is set to continue its growth in 2024, with a target of securing 500 billion baht (US$14 billion) worth of investment projects. The government’s goal is to increase investment in the EEC to 500 billion baht (US$14 billion) from 2023 to 2027, up from about 75 billion baht (US$2.1 billion) per year, aiming to expand the GDP of the EEC provinces by 6.3%.
In related news, Thailand’s biggest budget requests come from interior, education, finance ministries.
