Thailand’s Economy Faces Downgrade to 2.8% Growth, Prompting Government Stimulus Measures

(CTN News) – Thailand’s economy is likely to grow 2.8% this year, a steep reduction from an earlier prediction of 3.2%, the finance ministry said on Tuesday, strengthening the government’s appeal for stimulus to revive an economy it calls “crisis”.

Last year’s gross domestic product (GDP) expansion was also much lower, with the government estimating it at 1.8%, down from 2.7%.

The GDP expanded by 2.6% in 2022 and 1.5% in the July-September quarter of 2023 compared to the previous year.

Prime Minister Srettha Thavisin, who is also the finance minister, wants to revitalise Southeast Asia’s second-largest economy with a 500 billion baht ($14.05 billion) injection this year by sending 10,000 baht ($281) to 50 million Thais to spend within six months.

Tourism and Exports at the Forefront: Strategies for Recovery

The government is also attempting to improve tourism, a vital economic engine, to counter losses in exports, another critical industry expected to shrink 1.5% last year.

The finance ministry expects foreign arrivals to be 33.5 million in 2024, down slightly from a previous estimate of 34.5 million, and exports to expand 4.2% this year, down from an earlier forecast of 4.4%.

According to a government statement, the economy is predicted to grow faster than the previous year due to increased exports, services, and tourism arrivals.

IMF’s Statement on Thailand’s Growth: Acceleration Expected in 2024

Thai PM says central bank rate hikes are not healthy for the economy.

Separately, the International Monetary Fund (IMF) forecasted 2.5% growth in 2023, down from 2.7% in November but 4.4% in 2024, up from 3.6% in November.

“Growth is projected to accelerate briefly in 2024, on account of improvements in external demand and robust growth in private consumption bolstered by the government’s fiscal stimulus,” it stated in a statement released on Jan. 22.