According to the World Bank, Thailand’s economy is expected to expand by 2.4% this year, a decrease from the 2.8% projection in April. The lower growth forecast is attributed to weaker-than-expected exports and early-year public investment.
The growth of Southeast Asia’s second-largest economy will be underpinned by sustained consumer spending, a gradual recovery in the tourism sector, and a rebound in exports.
The World Bank anticipates a significant surge in tourist arrivals in 2024, with numbers expected to reach 36.1 million, which is well above the 28.2 million arrivals in 2023 and approaching pre-pandemic levels. In 2023, Thailand’s GDP grew by 1.9%, falling behind its regional peers.
Furthermore, total arrivals are forecasted to surpass the pre-pandemic level, reaching 41.1 million next year, mainly driven by an increase in Chinese visitors.
Looking ahead to 2025, the World Bank projects a GDP growth of 2.8%, supported by robust demand domestically and internationally, alongside increased government spending. This growth forecast has been revised down from the initial 3% forecast in April.
In comparison, the Bank of Thailand predicts economic growth of 2.6% this year and 3% next year.
To bolster the economy, the government plans to introduce a 500 billion baht ($13.6 billion) handout scheme in the fourth quarter of this year, a key initiative of the ruling Pheu Thai Party’s platform in the 2023 election.
However, some experts have expressed concerns about the fiscal responsibility of the scheme, citing uncertainties over its funding and potential impact on public debt. The implementation of the scheme has already faced delays twice this year.
World Bank economist Kiatipong Ariyapruchya wrote in a note, suggesting that the Bank of Thailand should hold its key interest rates at 2.50% amid uncertainties.
