The World Bank has said Thailand’s economy is expected to recover, but growth will be slower than anticipated next year due to global headwinds.
In its monthly report, the World Bank said the kingdom’s economy is expected to expand 3.4% this year and 3.6% in 2023, with the 2023 growth projection 0.7 percentage point lower than the June forecast due to a faster-than-expected decline in global demand.
According to the World Bank’s economic monitor report, Thailand’s economy has shown resilience to recent global shocks, aided by resurgent private consumption and strong tourism inflows.
Data from the Office of the National Economic and Social Development Council indicated that Thai economic growth accelerated to 4.5% in the third quarter of this year, up from 2.5% in the second quarter.
Fabrizio Zarcone, the World Bank Country Manager for Thailand, noted that as Thailand looks towards resuming its path towards high-income country status, raising adequate fiscal space will be necessary to meet the additional spending need and provide a fiscal buffer for future shocks.
According to the report, Thailand’s fiscal response to the pandemic helped mitigate the impact of the crisis on household welfare. However, poverty is projected to rise this year as the country’s relief measures get phased out amid elevated inflation.
Kiatipong Ariyapruchya, the World Bank’s senior economist for Thailand, said the current crisis provided impetus to implement much-needed structural reforms required to improve the quality and allocation of spending as well as raise structurally low revenue. (NNT)