Big challenges of the Thai government to boost the Thai economy to reach a target of 2.7-3 % this year.
The latest risk was flooding in northern which hindered for tourism industry. Tourism industry was expected to become one main contribution to the economy.
According to data from the Ministry of Tourism and Sports, from January 1 to September 25, 2024, Thailand welcomed 25 million foreign tourists whose accumulated spending amounted to approximately 1.18 trillion baht. This means that the government and private sector need to generate an additional 800 billion baht in the rest three months.
The ministry concerned about the lower spending per tourist compared to 2019, even before the pandemic.
The Asian Development Bank (ADB) cut the country’s gross domestic product growth estimate for this year to 2.3 % from 2.6 %.
ADB cut Thailand’s GDP forecast for next year to 2.7 %
The bank also cut Thailand’s GDP forecast for next year to 2.7 % from 3 %, citing global economic uncertainty and domestic structural problems in export-oriented manufacturing.
Sluggish growth in Thailand hit South-east Asia’s growth forecast for the year, thanks to weaker-than-expected public spending, private investment and merchandise exports.
In Southeast Asia, the 2024 GDP growth forecast was revised down to 4.5%, below the previous estimate of 4.6%, with the revision driven by downward revisions for Myanmar, Thailand and Timor-Leste.
Weaker growth in Myanmar and Timor-Leste, led the ADB to lower its forecast for this year to 4.5 % from 4.6 % for the South-east Asian region, which includes the 10 member nations of Asean and Timor-Leste.
In an update to its flagship outlook report published every April, ADB said on Wednesday (Sep 25) that the region remains on track to meet next year’s growth forecast, which stayed unchanged at 4.7 %, buoyed by robust domestic and external demand.
Thai export products fail to meet the global demand
ADB reported Thailand may not fully capitalise on accelerating trade volumes worldwide as several export products fail to meet the global demand shift towards high-technology goods.
Merchandise export performance could be further hampered by geopolitical uncertainty and rising production costs due to increases in daily minimum wage, electricity and energy prices, higher freight and surcharge costs, as well as a shortage of containers.
Nevertheless, services exports growth in South-east Asia’s second-largest economy is expected to remain strong.
Digital wallet scheme was not expected to impact private consumption significantly
ADB estimated that Thailand’s digital wallet scheme was not expected to impact private consumption significantly due to usage restrictions.
On the public spending side, government investment is expected to accelerate in the remaining months of 2024, on the back of expedited disbursements following the approval of the country’s delayed fiscal budget.
But it is unlikely to compensate for the deep contraction in the first half of the year, said the bank.
Thailand was one among four were downgraded
Thailand aside, Laos, Myanmar and Timor-Leste have also had their growth forecasts downgraded.
In Laos, ADB believes continued limited refinancing options amid the nation’s considerable external debt maturities will lead to greater public sector reliance on domestic markets to raise funds. This, in turn, will limit recovery in the private sector, depress household spending, and dampen business confidence, said the bank.
In Thailand, ample market supply translated into lower food prices, which are expected to creep up through the year with unfavourable weather conditions.
Thailand’s private consumption is also forecast to slow next year due to high household debt, weak consumer confidence, stricter bank regulations and concerns over rising factory closures.
