How Thailand's economy fared in 2024 and the path forward

 

As 2024 comes to a close, Thailand's economic landscape reflects a mixture of progress and setbacks. 

 

At the beginning of the year, leading banks, institutions and credit rating agencies predicted economic growth between 3.5% and 4%. 

 

However, recent estimates have adjusted this figure down to around 2.8% to 3.2%, reflecting global economic headwinds and domestic challenges faced throughout the year.

 

 

Att Pisanwanich, adviser at Intelligent Company Research Consultant (IRC), points to five critical factors that influenced this performance: mounting household debt, investment uncertainties, Trump's fiscal policies, China’s economic challenges, and escalating geopolitical tensions. The export sector faced particular pressure, with growth limited to 1.9% amid proposed US tariff increases.

 

 

 

          Strategy blueprint for 2025

In response to those challenges, Prime Minister Paetongtarn Shinawatra's administration has unveiled an extensive economic revival package for 2025, representing one of the most ambitious policy initiatives in recent years. 

 

The comprehensive plan includes:

• Digital transformation and financial innovation

               - A groundbreaking digital wallet stimulus programme aimed at injecting vitality into local economies
               - Advanced digital infrastructure development to position Thailand as a regional AI hub
               - Streamlined digital platforms for government services

 

 

• Social development initiatives

               - An innovative "One District, One Scholarship" programme supporting academic excellence
                - Affordable housing schemes with creative financing solutions
                - Comprehensive social welfare programmes targeting vulnerable populations
 

 

• Infrastructure and transportation

               - Implementation of flat-rate electric train fares to ease commuter burden
               - Enhanced public transportation networks
               - Sustainable urban development projects

 

• Economic stimulus and business support

               - Targeted debt restructuring programmes for individuals and businesses
               - SME protection measures against unfair competition
               - Streamlined visa processes to boost tourism
               - Energy cost reduction initiatives

 

 

Dr Thanawat Polvichai, director of the University of the Thai Chamber of Commerce's Centre for Economic and Business Forecasting, emphasises the critical importance of digital transformation in these initiatives. 

 

"The government must develop precise and practical policies to catalyse digital transformation. Success in 2025 will hinge on our ability to strengthen the digital economy, enhance business infrastructure, and foster innovation for sustainable growth", he explained.

 

 

          Expert insights and recommendations

Amornthep Chawala, chief economist at CIMB Thai Bank, views the government's focus on digital transformation and infrastructure development as strategically sound. 

 

 

"These forward-thinking policies can significantly boost economic growth, provided they are implemented effectively and systematically", he noted.

 

 

However, Pipat Leungnaruemitchai, chief economist at Kiatnakin Phatra Financial Group, advocates for a balanced approach. 

 

"While the stimulus measures are promising, we must address fundamental issues like public debt and income inequality to ensure sustainable growth", he cautioned.

 

 

 

 

In a crucial advisory for the coming year, Dr Somprawin Manprasert, chief economist at Siam Commercial Bank's Economic Intelligence Center (SCB EIC), emphasised the need for prudence at both individual and corporate levels. 

 

"While we see promising initiatives from the government, both entrepreneurs and employees should maintain careful financial planning in 2025. This isn't just about cautious spending—it's about smart investment decisions and building financial resilience in an uncertain global environment", he warned.

 

 

          Balancing optimism with prudence

The Thai Chamber of Commerce, through its president Sanan Angubonkul, has highlighted immediate priorities for economic stability, including controlling utility prices and basic consumer goods costs. These measures are seen as crucial for both business operations and household welfare.

 

 

He highlighted the importance of improving competitiveness among SMEs by reducing their debt burden and suspending loan repayments.

 

While global uncertainties persist, the government's comprehensive policy framework, coupled with the resilience of Thai businesses and consumers, provides grounds for cautious optimism, he said.

 

Despite the challenges, there is room for optimism. With strategic planning, fiscal discipline, and a focus on innovation and education, Thailand can navigate the uncertainties ahead and build a resilient economy, he added.

 

 

The success of Thailand's economic journey in 2025 will depend not only on effective policy implementation but also on the collective effort of government, businesses, and citizens to navigate challenges while seizing new opportunities for growth and development.

 

 

In light of these expert assessments, we ought to approach the new year with measured optimism and steadfast determination, poised to make the most of forthcoming opportunities, Sanan said.