Economists surveyed by Reuters anticipate that Thailand’s economic growth would slightly accelerate in the second quarter, driven by increased government expenditure. Despite this positive development, challenges such as slower rebound in tourism and elevated household debt are casting shadows over the overall economic outlook.
Projections indicate that Southeast Asia’s second-largest economy is likely to expand by 2.1% in the April-June period, up from 1.5% in the previous quarter. On a quarterly basis, GDP growth is expected to reach 0.9%, a slight dip from the 1.1% growth in Q1.
An analyst from Krung Thai Bank highlighted that government spending and investment played crucial roles in boosting economic growth in Q2. However, concerns linger regarding potential slowdowns in private consumption due to high household debt and a decrease in service exports.
The economic landscape faced further uncertainty as Prime Minister Srettha was dismissed by the court, leading to increased political instability in the country. Additionally, the World Bank revised down Thailand’s 2024 GDP growth forecast to 2.4% from 2.8% in June, citing underperformance in exports and public investments.
Weakening global demand and a deceleration in China, a key trade partner, have also impacted Thailand’s vital tourism industry, which has yet to fully recover from the effects of the pandemic.
Overall, Thailand’s economic growth for the year is expected to average at 2.6%, reflecting a significant downgrade from the initial forecast of 3.4% at the beginning of 2024, based on a separate Reuters poll conducted in July.
