Thailand’s economy grew by 3.0%YoY in 3Q-2024. Compared to the previous quarter, the economy expanded by 1.2%. The uptick was driven by a higher current account surplus bolstered by robust export performance, continued expansion in tourism receipts and private consumption, and a substantial growth in public investment and government consumption. Meanwhile, downward pressure came from increased imports and a contraction in private investment, particularly in the construction sector. As a result, the Thai economy grew by 2.3%YoY in the first three quarters of 2024.
Looking ahead to the final quarter of this year, the Thai economy is expected to expand at an accelerated pace. KResearch thus maintains its 2024 economic growth forecast at 2.6%, supported by the following factors:
- Exports are set to grow more than previous estimates, driven by an upturn in the electronics cycle. Additionally, shipments to the US are likely to continue, expanding ahead of the announcement of tariff hikes by President-elect Donald Trump, although the growth rate is likely to slow compared to the figures seen in the first 9 months of 2024.
- Public investment and government consumption are projected to record favorable growth in 4Q-2024, partly due to a low base effect resulting from the delayed disbursement of the fiscal 2024 budget. Meanwhile, the fiscal 2025 budget disbursement began in October 2024 and is on track to achieve the target.
- Private consumption in 4Q-2024 is likely to be supported by an increasing number of tourists during the peak travel season. The 10,000 baht handout scheme is expected to stimulate consumption to some extent. However, the stimulus effect may fall short of the government’s estimate due to economic uncertainties, high household debt, and the impacts of flooding.
- Thailand’s economy is expected to face heightened risks in 2025. Close attention must be paid to President-elect Donald Trump’s policies, particularly hikes in import tariffs, which could pose greater challenges to Thai exports going forward. Moreover, the tourism industry may be inhibited by the global economic downturn, especially in China. However, public spending and investment are projected to accelerate and serve as the key drivers for the country’s economic growth next year. Additionally, private investment is expected to improve, supported by foreign investment inflows. Details of the projection will be presented at KResearch’s 4Q-2024 press conference on December 4, 2024.
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