11 July 2024

Thailand’s economic growth this year is expected to be about 2.8%, largely due to increasing exports and tourism. This compares favourably against 1.8% GDP growth last year, according to Pornchai Theeravet, director-general of the Fiscal Policy Office and spokesman for the Finance Ministry.

He said that 33.5 million foreign arrivals are expected this year, an increase of 19.5% year-on-year. This will generate about 1.48 trillion baht in tourism revenues, an increase of 23.6% over last year.

Thai exports last year contracted by 1.5%, due mainly to an economic slowdown among Thailand’s key trading partners. Especially hard hit were exports of automobiles, computers and electronic goods, as reflected in the manufacturing production index.

Last year, imports also dropped by 1.9% year-on-year, due to a reduction in the value of the Thai baht in the first three quarters of the year, before it rebounded in the fourth. Pornchai said that the US Federal Reserve’s increase in interest rates and the relaxation of fiscal policy by Japan have contributed to the strengthening of the Thai baht, to an average of 34.81 baht to one US dollar.

As far as the capital and bond markets are concerned, he said foreign investors have offloaded about 330 billion baht of their investments, resulting in an outflow of foreign currencies last year.

For this year, he predicts that Thai exports will grow by about 4.2%, while imports will rise by about 4%, adding that inflation is expected to increase by just 1% for the whole year, with Dubai crude expected to stabilise at US$82 /barrel, which is close to last year’s US$81.9/barrel due to a slowdown in demand.

For long-term sustainable economic development, Pornchai said that the government should prioritise infrastructure development, such as sustainable energy development, investment in the digital economy and development of regional connectivity. It should also address skills development, to provide Thai workers with the skills required by the changing labour market, and ensure fiscal stability.