Thai PM yet to unveil new stimulus to boost economic growth

After nearly three months in office, Prime Minister Paetongtarn Shinawatra is poised to influence Thailand’s economic growth through a series of new stimulus proposals. These measures aim to address various economic challenges and are anticipated to be unveiled shortly.

The National Economic and Social Development Council (NESDC) recently projected Thailand’s GDP growth to be between 2.3% and 3.3% for 2025, averaging at 2.8%. Despite these optimistic figures, the NESDC cautions that rising household debt and industry concerns about the government’s performance in key areas could hinder achieving these growth targets.

Thienprasit Chaiyapatranun, Thai Hotels Association president, noted that the government has yet to effectively stimulate economic growth as expected.

He further emphasised that while tourism should continue to drive GDP, with an expected 40 million foreign visitors, growth in other sectors may remain sluggish.

To bolster tourism, Thienprasit suggests implementing promotions during the low season and increasing governmental budgets for meetings and conferences to stimulate the hospitality sector. Enhancing foreign investment, particularly in large-scale projects like the Land Bridge and entertainment complexes, is also advocated.

Tanit Sorat, Employers’ Confederation of Thai Trade and Industry (EconThai) Vice-Chairman, noted that exports will continue to play a key role in driving Thailand’s GDP next year.

Trump’s tariffs

However, he warned that goods labelled as made in Thailand must genuinely be Thai products to prevent potential issues with tariffs from the US under President-elect Donald Trump’s administration.

The Thai Chamber of Commerce, led by Sanan Angubolkul, is more optimistic. Sanan anticipates a 3% growth in GDP for 2025, buoyed by government stimulus measures and a recovering economy. Exports, despite being impacted by a strong baht earlier this year, remain a vital economic driver.

Sanan highlighted the importance of promoting Thailand’s cultural events globally to attract high-income tourists, which could significantly boost tourism revenue and job creation. Furthermore, the government’s disbursement of the fiscal 2025 budget and debt relief measures are expected to enhance economic liquidity.

Chak Reungsinpinya, head of research at Maybank Securities (Thailand), expressed optimism following discussions with Finance Minister Pichai Chunhavajira. The minister outlined short-term policies like cash handouts and debt restructuring while maintaining fiscal discipline with a targeted budget deficit below 4% of GDP.

Maybank projects a 3.4% GDP growth in the fourth quarter of 2024, attributing it to public investment and consumption. However, risks from rising trade barriers, particularly those involving China, could impede growth.

Prakit Siriwattanaket of Merchant Partners Asset Management acknowledged the government’s increased budget disbursement as a key factor in surpassing GDP forecasts for the third quarter. He anticipates further interest rate cuts by the Bank of Thailand to stimulate growth.

Unexpectedly strong GDP

CIMB Thai Bank’s chief economist, Amonthep Chawla, described recent GDP growth as unexpectedly strong, driven by public spending and domestic consumption. However, he remains cautious about the fourth quarter’s performance due to weaker purchasing power among low-income groups.

Finally, Thitima Chucherd from SCB EIC plans to revise growth projections upwards slightly following the NESDC’s report. While various stimulus initiatives are contributing positively to growth, challenges from potential shifts in US trade policies could impact Thailand’s economic performance in 2025, reported Bangkok Post.