NESDC monitors China's economic woes that could impact Thailand’s economy
The National Economic and Social Development Council (NESDC) is keeping a close watch on the economies of its major trading partners, notably China, which expanded in 2023 at a rate lower than many anticipated and could affect Thailand’s growth over the next 12 months.
The Council, which has been closely monitoring China's economic situation, estimates a 3% expansion in 2024, despite China's negative export performance since the second quarter of 2022.
NESDC's secretary-general, Danucha Pichayanan, revealed that Thailand's economy in 2024 is expected to expand between 2.7% and 3.7%, with a median projection of 3.2%, bolstered by increased government spending following the enactment of the 2024 and 2025 fiscal budgets, sustained private sector investment, and continued domestic consumption since 2023.
While there has been a recovery in public spending and domestic tourism post-pandemic, benefiting the service sector due to increased travel and tourism within the country, concerns for Thailand's 2024 economic outlook primarily stem from external factors. The global economy's vulnerability and the potential impact of volatile economies, coupled with ongoing geopolitical issues in various regions, contribute to this uncertainty.
Globally, the NESDC forecasts a 2.7% expansion for the world economy in 2024, slightly down from 2.8% in 2023, with global trade volume expected to rebound to 3.2% from 2.1% growth last year.
Yet China's economy remains pivotal, and despite expectations, recent trends show a more significant slowdown due to real estate debt issues and a decrease in domestic consumption, posing risks to the global economy.
The Thai government's response and policies, especially in addressing China's economic challenges, are crucial. NESDC anticipates China's economy to grow by 4.3% in 2024, slower than the approximate 4.9% expansion of last year.
While the information provided so far offers a broad view, continuous monitoring of economic data is necessary to assess potential impacts on the economy. Despite China's economic challenges, Thailand's export potential to China remains high due to its large consumer base.
Regarding Thailand's export situation, the Commerce Ministry reported a 1% negative value in exports to China during the first 11 months of last year compared to 2022.
Geopolitical concerns, especially the situation in Israel, if contained, might not significantly impact oil prices. However, despite reduced production from certain countries and regional conflicts, oil prices have not seen a substantial increase, indicating global economic concerns for the upcoming year.
NESDC predicts a 3.8% expansion in Thailand's exports in 2024 compared to 2023, highlighting the need to maintain momentum in exports. Stimulating foreign tourist spending in Thailand, which has not reached its potential in the past, is crucial for the tourism sector's revival.
As the global economy faces potential slowdowns, Thailand's strategy should focus on expanding trade markets, attracting tourism, accelerating trade negotiations, and Free Trade Agreements (FTAs) with key trading partners.
