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

BANGKOK (Reuters) – Thailand’s economic growth is expected at 2.5% this year before accelerating to 3.2% 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% and 3.5% estimated in October, respectively. Southeast Asia’s second-largest economy expanded 2.6% in 2022.

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

Tourism and private consumption will be key growth drivers while exports are expected to rebound due to favourable 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% in 2025, the World Bank said.

Thailand’s planned digital wallet program, potentially amounting to 2.7% 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% to 5% of GDP, while public debt may reach 65% to 66% 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.

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