Thailand’s economic growth falls short of projections amid potential crisis

The pace of Thailand’s economic recovery slackened last year, falling short of the official predictions, as disclosed by government spokesperson Chai Wacharonke. This could increase the likelihood of the central bank considering an early easing strategy.

Chai revealed today, January 23, that the Thai economy only expanded by 1.8% last year, a drop from the 2.6% growth experienced in 2022. He cited these estimates from the Finance Ministry’s Fiscal Policy Office (FPO), which are scheduled for official release tomorrow.

These figures fall significantly short of the Bank of Thailand’s (BoT) prediction of 3.6% growth, made earlier the previous year. The central bank had already revised its gross domestic product (GDP) growth estimate downwards to 2.4% in November, according to a statement Chai disclosed to reporters via the LINE mobile application.

The latest GDP estimate could be leverage for Prime Minister and Finance Minister Srettha Thavisin and his advisors to reinforce their assertion that the economy is in crisis and reignite their call for a reduction in interest rates. Earlier this month, the premier expressed concern that the highest interest rate in a decade, coupled with a series of negative inflation readings, was causing economic harm.

The central bank is due to hold its next rate meeting on February 7, with the official GDP data to be released by the National Economic and Social Development Council (NESDC) on February 19.

The FPO’s statement, shared by Chai with journalists, attributed the economic deceleration last year mainly to a downturn in manufacturing. The office estimated a contraction of 1.5% in exports for 2023, reported Bangkok Post.

However, the FPO has forecast that GDP growth will pick up to 2.8% this year, driven by exports and tourism.

In related news, the Tourism Authority of Thailand aimed to boost Ranong province’s tourism revenue to 7 billion baht in the current year, targeting a significant increase in international visitors and establishing new routes.