World Bank cuts Thai growth outlook to 2.5% this year, 3.2% in 2024

Cargo ships are pictured near the port in Bangkok, Thailand, March 25, 2016. REUTERS/Athit Perawongmetha/File photo/

BANGKOK  – Thailand’s economic growth is expected at 2.5 percent this year before accelerating to 3.2 percent in 2024, supported by a recovery in tourism, exports and sustained private consumption, the World Bank said on Thursday.

The growth outlook for 2023 and 2024 was reduced from 3.4 percent and 3.5 percent estimated in October, respectively. Southeast Asia’s second-largest economy expanded 2.6 percent in 2022.

Growth in 2023 was dampened by a contraction in exports as well as ongoing fiscal consolidation, the World Bank said.

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Tourism and private consumption will be key growth drivers while exports are expected to rebound due to favorable global trade despite the slowing Chinese economy, the bank said in its Thailand Economic Monitor.

Tourism is projected to return to pre-pandemic levels in mid-2025, set back by the Chinese slowdown, while economic growth is forecast at 3.1 percent in 2025, the World Bank said.

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Thailand’s planned digital wallet program, potentially amounting to 2.7 percent of gross domestic product (GDP), could boost near-term growth further by 0.5 to 1 percentage point over the two-year period in 2024 and 2025 if implemented, the bank said.

As a result, the fiscal deficit may increase to 4 percent to 5 percent of GDP, while public debt may reach 65 percent to 66 percent of GDP, it said.

Heightened geopolitical conflict and high oil prices, which could lead to another inflationary surge in Thailand due to its high dependency on energy imports, pose downside risks to the outlook, the World Bank said.