Abstract
Global economic growth is expected to slow in the latter half of 2024, with a projected growth rate of 2.7% for the year. Despite concerns over a potential hard landing, a soft landing is more likely due to strong momentum from major economies and supportive factors such as interest rate reductions by central banks. Thailand’s economy is expected to expand modestly, led by tourism but constrained by weaker exports and private consumption. Structural challenges and policy changes will shape the country’s economic outlook in the near future.
Summary
Global Economic Outlook
The global economy is expected to slow in the latter half of 2024 following robust growth in the first half. Concerns over a potential hard landing, particularly in the U.S., are resurfacing due to a rapidly rising unemployment rate. However, SCB EIC assesses that a soft landing remains more likely due to strong momentum from major economies during the first half of the year. Central banks reducing interest rates will help cushion the economy and reduce the likelihood of a recession, with the Federal Reserve and European Central Bank expected to make substantial cuts.
International Political Tensions
International political tensions will likely slow global economic growth and increase vulnerability in the medium term. Lingering geopolitical conflicts will lead to adjustments in global supply chains and trade, hindering inflation and policy rate adjustments in major economies. Post-election U.S. foreign policy will play a significant role in shaping the future dynamics of global trade, potentially leading to economic decoupling and global supply chain reconfiguration in the event of a Trump victory.
Thailand’s Economic Forecast
SCB EIC projects that Thailand’s economy will expand modestly in 2024 and 2025, driven by tourism and constrained by declining competitiveness in export growth. Private investment is projected to contract slightly this year but may resume growth next year. Structural challenges, such as pressure on SMEs and the automotive industry, continue to weigh on the Thai economy. The Monetary Policy Committee is expected to cut the policy rate in December in response to softening domestic demand, with the Thai baht projected to fluctuate but ultimately appreciate against the USD.
Source : Outlook Quarter 3/2024
