Abstract
The global economy is expected to grow steadily at 2.7% in 2024 and 2025, with varying performances in different regions. The US and China show promising signs, while the Eurozone and Japan may experience subdued growth. In Thailand, the economy is projected to grow by 2.5% in 2024 and 2.9% in 2025, driven by private investment and government spending. The Thai policy interest rate is expected to decrease to 2% by early 2025. Geopolitical tensions may accelerate global economic decoupling, presenting opportunities for Thai industries.
Summary
The Global Economy in 2024 and 2025
The global economy in 2024 and 2025 is expected to grow steadily at 2.7%, remaining below the pre-COVID-19 pace. The US economic outlook for 2024 has improved due to robust domestic demand. In Asia, China shows promising prospects from the manufacturing sector and economic stimulus measures, while India and ASEAN economies continue their growth trajectory. The Eurozone and Japan may experience subdued growth. In 2025, the global economic drivers are expected to shift with ASEAN economies accelerating, India maintaining growth, and the Eurozone and Japan improving modestly. However, the US economy might experience slower growth, and structural issues in China could hamper growth.
The Thai Economy in 2024 and 2025
In 2024, the Thai economy is predicted to slowly regain momentum with 2.5% growth, primarily driven by the service sector and rebounding foreign tourist arrivals. However, factors such as limited export growth and challenges in the manufacturing sector may pose downward pressures. Additionally, the Thai economy is expected to rebound in 2025 with a growth rate of 2.9%, driven by private investment and normal government disbursement levels. Challenges remain in both household and business sectors, with vulnerable groups requiring financial support measures to yield broad-based benefits.
Thailand’s Policy Interest Rate
SCB EIC anticipates the MPC to cut the policy rate to 2.25% by the end of 2024 and further to 2% in early 2025. Domestic demand impetus may be hindered by economic risks, structural issues, and financial vulnerability. The Thai baht is expected to gradually strengthen in the short term alongside economic recovery. Geopolitical risks could heighten uncertainties and global economic decoupling, presenting both challenges and opportunities for Thailand’s industry.
Source : Outlook Quarter 2/2024
