Abstract
SCB EIC revised down its growth forecast for Thailand to 2.6% in 2023 due to lower-than-expected Q3 GDP, decreased government spending, and slow recovery of Chinese tourists. The economy is expected to grow at 3.0% in 2024, driven by exports and private investment. Inflation will accelerate slightly, and the Thai baht is expected to stabilize and strengthen. The global economy will slow to 2.5% in 2024, with the tightening cycle among major economies ending. Thailand faces long-term structural issues, slow recovery from Covid-19, and rising uncertainties. SCB EIC proposes four enhancing policies to address these issues.
Summary
Growth Forecast for 2023 and 2024
SCB EIC has revised down its growth forecast for the Thai economy in 2023 to 2.6%, citing lower-than-expected Q3 GDP, government spending contraction, and slower tourist arrivals, mainly from China. The forecast for 2024 remains at 3.0%, with expectations of export expansion, increased private investment, and slow recovery in household income.
Monetary Policy and Inflation Outlook
The Thai policy rate is expected to be maintained at 2.5% throughout 2024, supporting the long-term potential of the economy. Inflation may accelerate due to supply-side pressures and the Digital Wallet scheme, but is expected to remain within the target range of 1-3%. The Thai baht is predicted to stabilize within the range of 35-36 baht per USD for the rest of 2024 and strengthen to 32-33 baht per USD by the end of the year.
Global Economic Outlook and Long-Term Concerns
The global economy is projected to slow to 2.5% growth in 2024, with China expected to face pressures from structural factors. SCB EIC is concerned about the long-term outlook for the Thai economy due to low investment, declining potential growth, and challenges from the Covid-19 pandemic. Additionally, rising uncertainties from external and domestic factors may impact the economy. SCB EIC proposes four enhancing policies to address these structural issues, focusing on social assistance, competitiveness, national investment strategies, and sustainability of the real sector.
Full report coming soon!
Source : Outlook Quarter 4/2023
