Thailand’s economy braces for slow growth

Thailand’s economy is set to experience slow growth in the coming years, with GDP forecasts for this year ranging between 3-3.4%. Several factors, including sluggish growth in exports, subdued Chinese demand for consumption and tourism, geopolitical risks, and a shortage of skilled workers, are expected to influence this. Despite these challenges, industry executives are optimistic and are devising strategies to navigate the uncertain business climate.

Yol Phokasub, CEO of Central Retail Corporation Plc, Thailand’s largest retailer, highlighted geopolitical tensions and the unpredictable dynamics of elections as significant global challenges. Domestically, he flagged ageing demographics, recovery trajectories of key sectors, elevated interest rates, and a surge in household and business debt as areas of concern. However, he expressed optimism for the second half of the year, anticipating a fresh economic outlook driven by government budget allocation and higher investment from public and private sectors.

Kattiya Indaravijaya, CEO of Kasikornbank (KBank), shared a similar outlook, predicting higher economic growth this year despite local and global uncertainties. She expects Thailand’s GDP to grow by 3.1% in 2024, up from an earlier estimate of 2.5%, primarily due to an upturn in exports, tourism, and government stimulus measures. Kattiya noted, however, that a global economic slowdown, rising geopolitical tensions, and the Federal Reserve’s monetary policy direction could lead to significant fluctuations in the baht against the US dollar.

According to Tassapon Bijleveld, Executive Chairman of Asia Aviation, tourism will be the growth driver this year. He sees potential for balancing the market by diversifying away from dependence on the Chinese market, looking instead towards the Indian market and new destinations such as Kazakhstan and Saudi Arabia. He also emphasised the need for the government to support Small and Medium-sized enterprises (SMEs) to drive overall consumption.

Uten Lohachitpitaks, Group CEO of Pruksa Holding, anticipates a slowdown in the residential market this year due to an unfavourable economy, reduced purchasing power, high-interest rates, and increased development costs. However, he also sees opportunities in the low-priced housing market, as there is healthy demand for residences.

The electric vehicle (EV) market, according to Narong Sritalayon, Managing Director of Great Wall Motor (GWM), will continue to thrive this year. He attributes this to the EV3.0 and EV3.5 government incentive schemes, which offer tax cuts and subsidies to promote EV consumption and production. He expects sales of battery EVs to soar to 130,000 units this year.

Economy Growth

Chaiwat Kovavisarach, Group CEO of energy conglomerate Bangchak Corporation, predicts that the economy will continue to grow this year, with tourism as the main contributor. He notes that global crude oil prices are expected to decline, which will play a key role in fuelling economic activities.

In the food industry, Yod Chinsupakul, CEO of Line Man Wongnai, highlighted the need to adapt to rising ingredient costs, suggesting the adoption of efficient inventory management technology as a solution.

Varanit Athijaratroj, Managing Director of HP Inc Thailand, sees growth opportunities in Thailand, particularly in micro and small businesses, which she described as the backbone of the economy.

Pakorn Peetathawatchai, President of the Stock Exchange of Thailand (SET), expects the economy to recover this year, leading to a rebound of the Thai stock market. He anticipates that this will attract foreign fund inflows, pushing the SET index to hit 1,600 points this year.

Overall, while challenges persist, there is a sense of cautious optimism among Thai business leaders regarding the economic outlook. They underscore the importance of strategic planning, investment, and leveraging technology to navigate the evolving business landscape, reported Bangkok Post.