Thailand's average growth forecast at just 2.8% over next decade
Kingdom faces challenges impacting its economy, including political uncertainty and demographic changes
The latest report by Angsana Council, Bain & Company, and DBS Bank of Singapore has revealed the ASEAN economic growth outlook for the next decade, from 2024 to 2034.
The region is projected to grow at an average rate of 5.1% annually, with Vietnam and the Philippines experiencing the fastest growth.
In contrast, Thailand’s economy is anticipated to grow at a mere 2.8% annually, which is close to Singapore’s projected average growth rate of 2.5%.
Thailand's economic growth has been steadily declining since 2000. From 2000 to 2009, the average growth rate was 4.3%. In the following decade (2010-2019), it dropped to 3.6%. During the period from 2020 to 2023, which was marked by the Covid-19 pandemic, Thailand's economy did not grow.
The report highlights several supportive factors for Thailand’s economy over the next decade, including the tourism sector, maintaining its role as an automotive manufacturing base, and having a well-established infrastructure. The private sector also includes strong, regionally growing companies such as PTT Group, SCG, and Thai Union.
However, Thailand faces challenges impacting its economy, including political uncertainty and demographic changes. The ageing population and declining birth rates are affecting domestic purchasing power and impacting businesses.
Nonarit Bisonyabut, senior researcher at the Thailand Development Research Institute (TDRI), noted that a GDP growth rate of 2.8% per year is satisfactory given Thailand's level of development. Countries with lower development levels, such as the Philippines, Indonesia and Vietnam, are expected to grow faster thanks to their lower development stage. Thailand is expected to reach developed status around 2046.
“Thailand is categorised as a middle-income developing country with a growth potential of about 3.5% per year (pre-Covid-19). However, post-Covid-19, estimates suggest potential growth may drop to around 3% per year on average. This level of growth is moderate compared with other countries, slower than China and India, but faster than many other countries at a similar level of development.”
Vietnam’s economy, after a period of rapid growth, is expected to slow down. For example, China, which once grew at 10%, now has a growth rate of around 4.5-5%. Vietnam may surpass Thailand if it maintains its growth rate, but it must sustain this level for another 10 to 20 years.
Malaysia has already surpassed Thailand in terms of growth and maintains its potential well, partly due to its abundant resources, investment in the services sector, and policies aligned with global chip-industry trends, which support continued economic growth.
