The World Bank has released a report in October, revising down its economic growth forecast for Thailand this year to 3.4%, reflecting a slower recovery compared to other countries in the ASEAN region.
The World Bank has adjusted its growth projections downward for developing countries in the East Asia and Pacific region due to the continued slowdown of China’s economy and global uncertainties, such as high interest rates and sluggish trade.
For Thailand, the economy continues to recover at a slower pace compared to its ASEAN counterparts, and reduced exports pose challenges for the Thai economy. The World Bank has revised its economic growth forecast for Thailand for this year from the previously estimated 3.9% in April to the current 3.4%, following a 2.6% expansion in 2023. The bank also forecasts a 3.5% growth for Thailand in 2024, slightly lower than the previous estimate of 3.6% in April.
The Thai economy in 2023 is being driven by resurgence in the tourism sector and private consumption. However, exports are expected to contract by 2.1% in terms of US dollars due to reduced demand from key trading partners. The delayed formation of the Thai government after recent elections has led to a slowdown in public and private sector investment.
The report suggests that tourism and domestic consumption are likely to offset weaknesses in foreign demand, with foreign tourists expected to return to pre-COVID-19 levels by the end of 2024.
The World Bank also predicts that Thai inflation will moderate to 1.5% in 2023, which is lower than most emerging market economies. This is due to the decline in global energy prices and stable commodity prices.
It is also anticipated that Thailand’s public debt in 2023 will remain high, exceeding 60%, and the country will return to a current account surplus of 0.5% of GDP this year, ending two consecutive years of deficits in 2021 and 2022. (TNA)