World Bank cuts Thai growth to 2.8% on weaker exports

April 01, 2024

Thailand’s economic growth is expected at 2.8% this year before accelerating to 3.0% in 2025, the World Bank said on Monday, on account of weak exports and a delayed budget.

The growth outlook for 2024 and 2025 was reduced from 3.2% and 3.1% respectively, as forecast in December.

Southeast Asia’s second-largest economy expanded 1.9% in 2023 and unexpectedly shrank 0.6% in the final quarter of 2023 from the third.

Thailand’s central bank in February also lowered its 2024 growth outlook to 2.5% to 3.0% from 3.2%.

The cut stems from global trade slowing while the delayed budget slowed government spending, World Bank Senior Economist Kiatipong Ariyapruchya, told reporters in a virtual briefing.

Dimmer export and public investment prospects also attributed to new outlook, the World Bank said in statement.

The shipper’s council expects exports to grow 1% to 2% this year.

Tourism and private consumption will be key growth drivers, the World Bank said, with tourist arrivals projected to reach 90% of pre-pandemic levels this year.

The government is aiming for a record 40 million foreign visitors this year after welcoming 28 million visitors in 2023.

Prime Minister Srettha Thavisin has characterised the economy as facing a “crisis” and in need of a major fiscal stimulus through his government’s delayed signature policy, a $14 billion handout to 50 million Thais.

The ‘digital wallet’ scheme could add 1% to growth but will increase public debt, Kiatipong said.

Source: The Nation