Abstract
In Q4/2023, the Thai economy saw modest growth fueled by private consumption and an increase in tourist numbers. However, public consumption and investment declined due to delays in enacting the 2024 Budget Act. SCB EIC predicts higher economic growth in Q1/2024, driven by tourism recovery and stimulus measures. Despite positive factors, the Thai economy is expected to recover slowly in 2024 due to supply chain risks, delayed public spending, and weak manufacturing sectors. Budget constraints and debt accumulation further hinder economic recovery.
Summary
In Q4/2023, the Thai economic expansion remained subdued
The Thai economy in Q4/2023 demonstrated a modest 1.7% year-on-year growth, with a -0.6% quarter-on-quarter, seasonally adjusted, contraction. In terms of the expenditure approach, the Thai economy saw an upswing towards the end of 2023, driven by robust private consumption growth. This surge was propelled by increased consumer confidence, a rise in tourist numbers, a favorable unemployment rate, and a rebound in merchandise exports. However, the Thai economy grappled with significant challenges, notably a sharp contraction in both public consumption and investment.
SCB EIC anticipates higher Thai economic growth in Q1/2024
SCB EIC views that the Thai economy in Q1/2024 should expand by a higher rate than the prior quarter driven by a robust private consumption growth, particularly following tourism sector recovery from an increasing influx of Chinese tourists. A significant surge of Chinese tourists is expected in February, coinciding with the Chinese New Year festival, while the number of tourists visiting Thailand from various countries already recovered to near-normal levels.
In the broader context, the outlook for the Thai economy in 2024 remains worrisome, characterized by a slow recovery
SCB EIC views that the Thai economy in 2024 should recover at a slow pace, primarily driven by private consumption recovery momentum. The services sector, particularly benefiting from the continual return of foreign tourists and ongoing domestic travels by Thais, is anticipated to play a pivotal role in boosting the economy. Similarly, private investment should improve, indicated by higher project approvals from the Board of Investment and a rebound in exports according to more favorable global trade and manufacturing conditions. However, potential disruptions stemming from supply chain risks, such as attacks by Houthi rebels and the drought impacting the Panama Canal, warrant monitoring.
Source : SCB EIC expects a slower growth momentum for Thai economy, underweighting recovery in 2024.
