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Dr. Amonthep Chawla, Head of Research of CIMB Thai Bank, revealed that we have revised the GDP forecast at 3.0% in 2023 and 3.5% in 2024, following a decelerating Chinese economy, affecting exports; growth drivers would remain on tourism-related services and strong purchasing power among upper middle class amid awaiting government stimulus in 2Q/24.


Research concerns that Thailand’s economic recovery is uneven, with weak purchasing power among low-income households and it is aggravated by drought and high household debt. The tourism sector remains robust, but it is concentrated in major tourist cities.


Economic outlook of Thailand in 2024 could depend on global economy and government policies, which may vary our GDP forecasts on certain parameters, such as exports, tourism, private and public consumption and investment


The Good

  • US could avoid soft landing scenario while China could inject stimulus policies to drive growth and could avoid problems of corporate debt and property bubble
  • Thailand’s exports could rebound quickly while the number of tourist arrivals could grow higher than expected
  • Government’s stimulus policies are able to implemented by year end 2023, aiming to inject cash to low income households and stimulate consumption while FDI increases amid political stability and higher investors’ confidence


The Bad

  • US economy could decelerate amid higher-for-longer interest rate and inflation while China could experience a sharper slowdown due to corporate debt default and property market bubble
  • Thailand’s exports are projected to grow modestly amid weak global demand while tourism could remain a growth driver
  • Government’s stimulus policies could be implemented by 2Q24 after budget approval, driving consumption and investment while FDI could relocate to Thailand


The Ugly

  • Slowing US economic growth with a technical recession in 1H24 while China may experience a sharper slowdown but remains above 4% growth in 2024
  • Exports could fall amid weak global demand and supply chain issues while tourism revenue could grow slower than expected
  • Government’s stimulus policies are delayed to 2H24 which could aggravate consumption among low-income households which are affected by severe drought situation


The Bank of Thailand could end the rate hike cycle at 2.25% for a pre-emptive strike against high inflation expectation due to government’s stimulus policies, especially minimum wage increase, while the THB is projected to gain strength against the USD, following an expectation of US rate cuts in 2024 and stronger tourism revenue in Thailand.


The risk factors that could potentially lead to a lower expansion of Thailand’s economy are listed as Follows:

  1. Decoupling: The complete separation of the economies of the United States and China, driven by issues such as trade wars, technological conflicts, supply chain disruptions, could have significant impacts on Thailand's exports and the ASEAN region as a whole.
  2. De-dollarization: Reducing reliance on the US Dollar. Although the US Dollar remains the primary global reserve currency and a key currency for international transactions and debt settlements, there is a trend toward other currencies, especially the Chinese Renminbi (used within the BRICS group), gaining more prominence in the global financial system. While the RMB may not fully replace the US Dollar, its increasing usage could introduce to more exchange rate volatility.
  3. Dis-inflation: Low inflation, particularly from China, which is experiencing deflationary pressures as its economy slows down, has led to a decrease in the prices of goods. This can have divergence of monetary policies in the ASEAN region compared to the United States, which still faces inflationary pressures and may raise interest rates.
  4. Digitization: Thailand’s economy is entering the digital era, and it is expected that government measures in the future will increasingly involve technologies like Blockchain to help trace the source of funds. However, small and medium-sized enterprises (SMEs) in various provinces may struggle to adapt to these technologies, potentially exacerbating inequalities. The new government may need to find ways to facilitate SMEs' access to these new initiatives.
  5. Democracy Movement: There is a political expression within the country, which calls for a new constitution draft that emphasizes greater democracy. This could potentially introduce political tensions or conflicts, which might impact investor confidence.