The World Bank has revised its economic growth outlook for Thailand, projecting a growth rate of 2.5% for the year 2023, with expectations of an acceleration to 3.2% in 2024. This adjustment comes amid a recovery in tourism, robust exports, and sustained private consumption.
The growth forecasts for both 2023 and 2024 have been revised downwards from the previously estimated 3.4% and 3.5%, respectively, as of October. In 2022, Thailand's economy expanded by 2.6%.
The World Bank attributes the dampened growth outlook for 2023 to a decline in exports and ongoing fiscal consolidation efforts. However, the bank anticipates a revival in exports due to favorable global trade conditions, despite the slowdown in the Chinese economy. Key drivers of growth will include tourism and private consumption.
Tourism is expected to return to pre-pandemic levels by mid-2025, although this timeline may be delayed due to the Chinese economic deceleration. The World Bank's forecast for economic growth in 2025 stands at 3.1%.
Additionally, the World Bank highlights Thailand's digital wallet program, which could potentially contribute to 2.7% of the country's gross domestic product (GDP). If successfully implemented, this initiative could further boost growth by 0.5 to 1 percentage point over the two-year period in 2024 and 2025. Consequently, the fiscal deficit might increase to 4% to 5% of GDP, while public debt may reach 65% to 66% of GDP.
Despite the positive outlook, the World Bank identifies potential downside risks, such as heightened geopolitical conflicts and elevated oil prices. Thailand's heavy reliance on energy imports could result in another inflationary surge in the event of rising oil prices.
