Thailand's real GDP growth will be 2.7 percent in 2024 and 2.9 percent by 2025

Today, we will tell you about Thailand’s real GDP growth. Thailand’s real GDP growth will be 2.7 percent in 2024 and 2.9 percent by 2025. Let’s get started:

The economy of the country is gaining momentum due to an increase in consumer spending and tourism, however, the country’s low inflation rate remains a concern

The International Monetary Fund (IMF) has predicted a 2.7 percent expansion in Thailand’s gross national product (GDP) in 2024, and 2.9 percent for this year, driven mostly by the continued growth in the tourism sector.

According to its “2024 Article IV Consultation with Thailand” report released the following day (February 20) the committee of directors at the IMF’s Executive Board concluded Thailand’s economy is slowly recovering but at a slower rate than the rest of the world.

The report noted that the economy grew modestly by 1.9 percent in 2023, and 2.3 percent during the beginning three quarters in 2024. It was due to an increase in consumption by private households and tourism growth.

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The rate of inflation remained low, hovering around 0.4 percent (y/y) each year through 2024, which is well below the Bank of Thailand’s targeted range of 1 to 3 percent. External factors like the decrease in energy prices worldwide and food prices as well as the decrease in import prices have influenced the rate however, local factors like subsidies to energy, price control,l and the de-winding of the fiscal support for pandemics can also be attributed to less inflation.

The balance of the current account grew to 1.4 percent of GDP by 2023 from -3.5 percent in 2022 and is continuing to record an unintentional surplus in November 2024. This is aided by steady growth in the tourism sector and increased exports, according to the report.

The IMF declared that it is expecting the slow cyclical growth in Thailand to continue, with the real GDP expected to increase by 2.7 percent in 2024, and then to rise to 2.9 percent by 2025. This is supported by the fiscal stance that is more expansive than is planned in the budget for 2025 which includes cash transfers in the amount of 1.0 percent of GDP as well as an increase in public investments.

The IMF believes that the tourism sector will remain a major driver of growth and private consumption which will further be boosted by cash transfers. As the economy continues to grow and increase, the rate of inflation is likely to rise, however, it remains at the lower end of the range that is targeted for 2025. The balance of the current account is expected to increase between 2024 and 2025. This is due to the steady increase in the number of tourists visiting the country.

The report outlined some threats to Thailand’s economy, such as an increase in global trade tensions, a growing geoeconomic fragmentation that could hinder export recovery and slow FDI flows, and a rise in volatility in the price of commodities that could impact the growth of the economy and trigger increases in inflation, as well as tighter financial conditions for longer periods.

On the domestic side the report forecasts that the debt of the private sector excess could affect the balance sheets of financial institutions and also reduce the supply of credit, thereby affecting growth. A heightened political uncertainty can affect policy implementation and weaken confidence, according to the report.

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