Fiscal Policy Office retains GDP growth estimate at 2.7% for 2024
Thailand's Fiscal Policy Office has maintained its GDP growth forecast for 2024 at 2.7 per cent, buoyed by a resurgence in the tourism and export sectors.
Looking towards 2025, GDP expansion is projected to accelerate further to 3%, with an aim to align monetary policy to bolster economic growth, enhance investment, and stimulate consumer spending.
Pornchai Thirraveja, director of the office and spokesperson for the Ministry of Finance, said they were maintaining the GDP growth estimate at 2.7% for 2024, retaining the previous estimate and continuing from a growth of 1.9% in 2023. Foreign tourist arrivals are anticipated to reach 36 million in 2024, while private consumption is forecast to grow by 4.6%, an increase from earlier estimates.
“Despite pressure from the recent flooding, which has caused estimated damage of around 4 billion baht across various sectors, government measures have helped offset impacts and instilled greater public confidence,” Pornchai said.
Export growth, denominated in US dollars, is projected to rise by 2.9% thanks to a stronger-than-expected recovery in the second and third quarters, allowing Thai businesses to fill gaps left by Chinese goods subject to US tariffs. Government consumption is also expected to increase by 2.1%, while public investment should rise by 0.8%.
However, private investment is forecast to contract by 1.9%, primarily due to reduced investment in machinery and tools linked to falling sales of internal combustion vehicles, necessitating close monitoring of the automotive sector’s adaptations.
On the domestic stability front, headline inflation is expected to be 0.4%, down from a previous estimate of 0.6%, attributed to declining energy prices on the global market. Nonetheless, low inflation is not classified as deflationary, given ongoing economic expansion this year.
Externally, current account trade for 2024 is projected to exceed US$10.3 billion, accounting for 1.9% of GDP.
The Ministry of Finance anticipates a more robust economic expansion at 3.0% per annum in 2025, with a forecast range of 2.5% to 3.5%. This growth is expected to be driven by four key factors: private consumption, exports, tourism, and investments from both the public and private sectors.
Private consumption is anticipated to continue expanding at 2.9% annually, while goods exports are likely to see a growth of 3.1%, as demand in global markets and trading partner economies remains strong.
The number of foreign tourists entering Thailand is expected to reach 39 million in 2025, positively impacting business confidence, alongside government spending supported by the 2025 budget that is poised for accelerated disbursement.
Pornchai highlighted that investment would be a crucial component of Thailand's economic engine in 2025, powered by two primary drivers.
Firstly, private investment is expected to grow by 2.3% annually, spurred by large-scale projects promoted through Board of Investment incentives, particularly in advanced technology and environmentally friendly industries.
Secondly, public investment is forecast to grow by 4.7% annually, driven by fast-tracking of expenditure on major infrastructure initiatives, including the high-speed rail project connecting three airports and the Laem Chabang Port Phase 3 development, which will enhance competitiveness and encourage further private sector investment.
In terms of fiscal policy, Pornchai indicated that the Ministry of Finance will focus on maintaining fiscal discipline and sustainability through effective management of public revenue and expenditure, while keeping public debt within sustainable limits.
After recent discussions with the Bank of Thailand (BOT), there is a consensus to temper the use of fiscal policy for economic stimulus, recognising that recent measures have contributed to rising public debt, posing future fiscal management challenges. The budget deficit for 2026 is anticipated to be around 3%.
According to the medium-term fiscal plan, the expenditure budget for 2025 is set at 3.75 trillion baht, with budget deficit targeted at 4.5% of GDP, reduced to 3.5% in 2026.
To complement these measures, the BOT is expected to support economic growth through appropriate monetary policy that encourages private investment and stimulates consumer spending.
In the last quarter of this year, the Ministry of Finance plans to propose measures to the prime minister on November 4, aimed at bolstering the economy by the year-end. Additionally, the integration of quasi-fiscal measures alongside monetary instruments will be sought to achieve the GDP growth target of 3.5% and maintain inflation at 2%.
