SCB

Thai exports in January 2024 reached a 19-month high, with a 10% increase in value reaching USD 22,649.9 million. Gold exports surged by 194.2%, contributing to the growth. Exports to all key destinations also improved. Trade balance reverted to a deficit due to increased imports for production and investments. SCB EIC predicts continued expansion in 2024.

Growing geopolitical tensions are accelerating economic decoupling, leading to shifts in international trade patterns. Thailand, with a neutral stance, is well-positioned to benefit. However, different sectors face varying risks and opportunities, requiring tailored export promotion policies and proactive business adjustments to navigate the changing landscape effectively.

Thai exports in May 2024 saw a 7.2%YOY increase, with strong growth in agricultural and manufacturing products, particularly fruits. Exports to China and India were robust, while those to Australia and the Middle East declined. SCB EIC expects continued export growth in June and the second half of 2024, with a positive outlook for 2025.

Global economy is expected to grow steadily at 2.7% in 2024 and 2025, with US improving, Asia showing promising prospects, and Eurozone and Japan experiencing subdued growth. Thai economy will slowly rebound in 2024 and continue growth in 2025. Thailand’s policy interest rate is expected to be cut, while geopolitical tensions may benefit some Thai industries.

The MPC voted to maintain the policy rate at 2.5%, with one member voting for a cut. They believe the current rate supports economic stability. Economic growth projections remain steady at 2.6% and 3.0% for 2024 and 2025, while inflation is expected to increase slightly.

Despite a modest 1.7% year-on-year growth in Q4/2023, the Thai economy struggled with challenges such as a decline in public consumption and investment. SCB EIC anticipates higher growth in Q1/2024, driven by robust private consumption and a resurgence in exports. However, a slow recovery is expected in 2024 due to various risks and limited public spending support.

Thai exports showed significant improvement in April 2024, with a 6.8% year-on-year increase. Agro-industrial and manufacturing products were key drivers of this growth. Despite a trade deficit, SCB EIC expects further export improvement in 2024, although global trade volume forecasts have been downgraded, impacting the overall growth outlook.

SCB EIC expects global economy to grow by 2.6% in 2024, with positive momentum in Q4/2023. Thailand’s economic growth forecast for 2024 is revised to 2.7%, facing challenges in manufacturing sector. Forecasted rate cuts and inflation rebound in 2H/2024 will impact Thailand’s economic outlook and monetary policy.