Global slowdown threatens Thailand’s growth

Although the Bank of Thailand (BoT)'s revised GDP growth forecast of 3.2-3.8% next year is possible, analysts are warning that an economic slowdown in China and the US means downside risks remain, while the effectiveness of the government's stimulus to ignite the economy is questioned, local media reported. The central bank's forecast for 2024 is in line with the think tank's estimate, with its official forecast scheduled for release on December 12, the Bangkok Post cited Nattaporn Triratanasirikul, deputy managing director of Kasikorn Research Center (K-Research), as saying. K-Research cut Thailand's 2023 growth outlook to 2.5%, from 3%, late last month as GDP expanded by only 1.5% in the third quarter, bringing expansion to 1.9% for the first nine months. While private consumption continues to expand in the fourth quarter as the tourism recovery gains ground during the high season, public spending and investment would put pressure on the growth looking forward as the government's fiscal budget has been delayed. Nattaporn stressed that the growth range of 3.2-3.8% is possible for the next year when the government's digital wallet initiative is launched to drive the consumption, but uncertainties still linger about this project. She said that an economic slowdown in China and the US would certainly pose risks to the Thai economy, which is highly related to the two markets. The Bank of Thailand believes that goods exports and tourism have recovered more slowly than expected due to subdued growth in China and a delayed upturn in global electronics demand. Total foreign arrivals are targeted to climb from 28.3 million this year to 34.5 million in 2024, which is still below the pre-pandemic level of 40 million in 2019. Meanwhile, the projected growth boost from the digital wallet scheme implicitly assumes a very low fiscal multiplier, roughly below 0.3x if 500 billion THB (14.2 billion USD) was disbursed for this project./. Source: Vietnam News Agency

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