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World Bank downgrades Thailand’s growth outlook to 2.4% due to declining exports
The World Bank has advised Thailand to refrain from easing monetary conditions until the economic outlook becomes clearer. This advice supports the central bank's interest-rate policy over the government's push for early easing.
The World Bank revised down Thailand’s 2024 GDP growth forecast to 2.4% from 2.8%, while projecting a GDP expansion of 2.8% in 2025 for the country.
Gross domestic product is projected to advance 2.4% in 2024, up from 1.9% growth in 2023, according to the World Bank’s Thailand Economic Monitor. The most recent forecast represents a 0.4 percentage point downgrade from the figures released in April. This downgrade is primarily attributed to weaker-than-expected exports and public investment in the early part of the year.
- 📉 World Bank’s Revised Growth Forecast for Thailand The World Bank has lowered its growth forecast for Thailand in 2024 to 2.4% from the previous 2.8% estimate due to factors like sluggish exports and public investment early in the year.
- 📊 Impact of Weaker Exports The downgrade in Thailand’s growth outlook is primarily attributed to weaker exports, contributing to the adjustment from the initial projection of 2.8% to the revised 2.4%.
- 💼 Factors Driving Thailand’s Growth Forecast The World Bank’s report highlights expectations of private consumption and tourism playing significant roles in driving Thailand’s gross domestic product growth to 2.4% in the current year despite the downward revision.
The World Bank anticipates a pick-up in Thailand’s GDP expansion to 2.8% in 2025, signaling a potential improvement in the country’s economic growth.
The World Bank has advised Thailand to refrain from easing monetary conditions until the economic outlook becomes clearer. This advice supports the central bank’s interest-rate policy over the government’s push for early easing.
“Thailand is at a pivotal moment needing to address key challenges including productivity and a decline in the working population due to an unfavorable demographic trajectory,”
Fabrizio Zarcone, World Bank Country Manager for Thailand.
Thailand’s economic growth forecast has been revised down to 2.4% for this year, with a focus on consumer spending, tourism recovery, and export rebound as driving forces. Foreign tourist arrivals are expected to surge to 36.1 million in 2024 and reach 41.1 million in 2025, approaching pre-pandemic levels, particularly driven by a return of Chinese visitors.
Public debt is projected to rise to 64.6 percent in fiscal year 2025. The fiscal deficit is projected to increase to 3.6 percent of GDP as budget execution normalizes and fiscal stimulus measures aimed at boosting consumption are implemented, in line with the government’s medium-term fiscal framework.
Headline inflation is projected to slow to a regional low of 0.7 percent in 2024, below the central bank’s target range, due to the moderation in food and energy prices.
The country’s economic growth is expected to be driven by consumer spending, a gradual recovery in tourism, and a rebound in exports. Additionally, there are expectations for additional measures to stimulate growth and potentially achieve a 3% growth rate for this year.
The report includes a special section that emphasizes the potential of Thailand’s secondary cities and their essential role in bolstering the country’s future growth. The economic vulnerability highlighted by the 2011 floods in Bangkok underscored the need to diversify growth across multiple urban centers, rather than concentrating too much in a single city.
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