Thailand’s GDP is forecasted to reach a low of 2.7% in 2024, before bouncing back with 3.0% growth in 2025, according to CGS International Securities (Thailand) (CGSI). Several factors are expected to contribute to this recovery:
Cash and Digital Handouts: The government’s cash handout initiative is projected to have a positive impact on GDP growth in 2025, with an estimated 20-30 basis points boost. Consumer spending and debt repayment are believed to be the primary destinations for these handouts.
Foreign Direct Investment (FDI): Thailand is seeing a surge in FDI interest, particularly in sectors like electric vehicles and data centers. The increasing demand for data centers is being fueled by a tech-savvy population with rising data needs.
International Arrivals: The tourism sector is anticipated to recover, with tourist arrivals expected to reach pre-pandemic levels of 35 million in 2024 and 38 million in 2025.
Inflation and Interest Rates: Inflation is projected to gradually improve, with CPI increasing to 1% in the second half of 2024 and averaging 0.5% for the year. Interest rate cuts are anticipated in 2025, with the 1-day repo rate forecasted to be at 1.75% by the end of the year.
Debt and Mega Projects: Debt levels, both household and public, are expected to remain high. Mega projects like the entertainment complex and land bridge are slated to begin construction in 2026, with other significant projects scheduled to kick off in 2025.
