World Bank forecasts 2.8% growth for Thailand

Thailand's economic growth is anticipated to reach 2.8% this year, as per the latest announcement from the World Bank on Monday. This projection comes amidst hurdles posed by weak exports and delays in budget implementation.

The forecast for 2024 and 2025 has been revised downwards from the earlier estimates of 3.2% and 3.1% respectively, as stated in December. Thailand, Southeast Asia's second-largest economy, saw a modest expansion of 1.9% in 2023 but unexpectedly contracted by 0.6% in the final quarter of the same year.

In February, Thailand's central bank also adjusted its growth outlook for 2024 to a range of 2.5% to 3.0%, down from the previous projection of 3.2%.

The slowdown in global trade and delayed government spending are cited as key factors contributing to the downward revision by the World Bank, explained Senior Economist Kiatipong Ariyapruchya. Dimmer prospects for exports and public investment further highlight the challenges ahead.

However, the World Bank notes that tourism and private consumption are expected to drive growth, with tourist arrivals projected to reach 90% of pre-pandemic levels this year. The Thai government aims to attract 40 million foreign visitors this year, following the 28 million visitors in 2023.

Prime Minister Srettha Thavisin acknowledges the economic challenges and emphasizes the need for a major fiscal stimulus. This includes the government's delayed signature policy - a $14 billion handout to 50 million Thais through a 'digital wallet' scheme. However, Kiatipong cautions that while this initiative could potentially add 1% to growth, it would also lead to an increase in public debt.