Thailand predicts 2.7% growth amid slow export recovery, high debt

Thailand’s economy is experiencing a gradual recovery, with projected growth of between 2.2% and 2.7% this year, according to a recent announcement by a prominent joint business consortium. The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), which includes key stakeholders from these sectors, has maintained its previous growth forecast.

Exports, a crucial component of Thailand’s economic engine, are also expected to increase by 0.5% to 1.5%, consistent with earlier estimates provided by the JSCCIB. Despite this, the recovery of the export sector has been sluggish, and high levels of household debt continue to dampen consumer spending, the group noted in a statement.

Data from the Ministry of Commerce revealed that during the January to April period, exports rose by 1.4% year-on-year, contrasting with a decline of 1% for the entirety of 2023. These figures underscore the challenges faced by Southeast Asia’s second-largest economy.

The economy saw a 1.5% growth in the first quarter compared to the previous year, surpassing analysts’ expectations but showing a slowdown from the 1.7% growth recorded in the preceding quarter. Last year’s growth rate was 1.9%, indicating that Thailand is trailing behind its regional counterparts as it grapples with high household debt, elevated borrowing costs, and the slow pace of China’s recovery.

The JSCCIB expressed optimism that government-led stimulus initiatives will bolster the economy.

Prime Minister Srettha Thavisin stated today, June 5, that he anticipates significant economic improvement in the fourth quarter, attributing this to the disbursement of delayed 2024 budget funds and the Finance Ministry’s consideration of additional stimulus measures.

Finance Minister Pichai Chunhavajira previously mentioned plans for short-term stimulus measures aimed at revitalising the economy, which is predicted to grow by only 2.5% this year. He emphasised that the economy should be expanding at an annual rate of at least 3.5%, reported Bangkok Post.

The government is pressing forward with a household stimulus package valued at 500 billion baht (US$13.65 billion), slated for launch in the fourth quarter.