Abstract
In Q4 of 2023, the Thai economy showed modest growth driven by private consumption, tourism, and exports, but struggled with declining public consumption and investment. The services sector thrived while construction and agriculture contracted. SCB EIC predicts higher growth for Q1 of 2024 due to increased Chinese tourism and consumer confidence. However, the slow recovery is expected to continue in 2024, with challenges including delayed public spending and supply chain risks. The Thai economy is anticipated to recover gradually in the coming months.
Summary
In Q4/2023: Thai Economic Expansion Remains Subdued
The Thai economy in Q4/2023 demonstrated a modest 1.7% year-on-year growth, with a -0.6% quarter-on-quarter contraction. Robust private consumption growth led the upswing, driven by increased consumer confidence, tourist numbers, favorable unemployment rates, and rebounding merchandise exports. However, challenges included a sharp contraction in public consumption and investment, mainly due to delays in enacting the 2024 Budget Act. The services sector showed growth, while construction and agriculture sectors faced contractions, and manufacturing weakened.
SCB EIC Forecasts Higher Growth in Q1/2024
SCB EIC anticipates a higher growth rate in Q1/2024 driven by robust private consumption growth post-tourism recovery, increased Chinese tourists, and positive impacts from economic relief measures. Normalizing tourism levels and export resurgence are also expected, although delays in the 2024 Budget Act could hinder public spending and investment.
Broader Outlook for Thai Economy in 2024
The Thai economy in 2024 is predicted to recover slowly, mainly due to private consumption momentum. While services and private investment are expected to improve, supply chain risks, delayed public spending from budget constraints, and weak manufacturing sectors pose challenges. The slow recovery is further exacerbated by the government’s budget constraints and the lack of clear signs of recovery in various sectors.
Source : SCB EIC expects a slower growth momentum for Thai economy, underweighting recovery in 2024.
