World Bank raises Thailand growth forecast to 3.9%

Thailand’s economy is expected to accelerate to 3.9% in 2023 due to increased demand from China, Europe, and the US, as well as growth in tourism and private consumption.

However, growth is projected to moderate in 2024 and 2025 due to weakening external demand. Inflation is expected to moderate to 2% in 2023. The return of tourists, particularly from China, has improved the tourism outlook said the World Bank in its latest Thailand Economic Monitor report.

Key Takeaways

• The World Bank has upgraded Thailand’s economic growth forecast to 3.9% for 2023, citing the recovery in tourism and strong private consumption as key drivers.
• Tourist arrivals are expected to reach 28.5 million this year, representing 84% of pre-pandemic levels, with a significant contribution from Chinese tourists.
• While the outlook for Thailand’s economy is positive, downside risks such as weaker global growth and political uncertainty still pose challenges to the country’s near-term growth prospects.

Despite recent growth, risks remain due to weaker global growth and political uncertainty.

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Thailand faces challenges such as an aging population, climate pressures, declining export competitiveness, and high household debt. The report emphasizes the need for effective climate adaptation to address the country’s vulnerability to floods and droughts.

The report highlights the need for a more robust framework for climate adaptation to address the country’s vulnerability to floods and droughts. Without proper adaptation, the costs of these natural disasters could be substantial.

The report recommends investing in water resources infrastructure, managing land and water use, and implementing legal and institutional reforms to prioritize flood and drought prevention measures. Improving water use efficiency, promoting a circular economy, and integrating nature-based solutions are also crucial for enhancing resilience.