Thai Business Group Reduces 2024 GDP Growth Prediction to 2.2%-2.7%

Thailand’s Economy Faces Slowdown as Export Recovery Falters

Thailand’s economy is facing a slowdown this year, with growth expected to be between 2.2% to 2.7%, down from a previous forecast of 2.8% to 3.3%. The Joint Standing Committee on Commerce, Industry, and Banking cited a slow export recovery as the main reason for the downward revision.

Exports, a key driver of the Thai economy, are now projected to increase by only 0.5% to 1.5% this year, compared to an earlier forecast of 2% to 3%. The first three months of 2024 saw a 0.2% year-on-year decline in exports, according to data from the commerce ministry.

The country’s economy grew by 1.9% last year, lower than the 2.5% growth in 2022, lagging behind regional peers. Factors such as high household debt, borrowing costs, and China’s economic slowdown have contributed to the sluggish growth.

The government has introduced a 500 billion baht ($13.5 billion) household stimulus plan in hopes of boosting growth. Additionally, the tourism sector, another important driver of the economy, is expected to see 35 million foreign arrivals this year. The government aims to attract a record of 40 million foreign visitors in total.

However, concerns have been raised about a government plan to increase the minimum wage, with business groups warning that it could hurt the economy and investment. Prime Minister Srettha Thavisin has defended the wage hike as necessary for growth, but the business group plans to request a reconsideration from the labor ministry.

Overall, Thailand’s economy is facing challenges that require careful navigation to ensure sustainable growth in the coming years.