IMF cuts Thai GDP forecast to 2.7% amid doubts on digital wallet plan
The International Monetary Fund (IMF) has reduced its 2024 GDP growth forecast for Thailand to 2.7% from 3.2% projected last October.
It cited the "possibility of reduced fiscal stimulus” amid criticism of a digital wallet scheme that looks set to drain Thai government coffers of 500 billion baht (about US$13.5 billion).
The IMF also cut its 2025 forecast for Thailand from 3.1% to 2.90%.
The cuts come despite a brighter 2024 forecast for Asia overall.
Asia’s economy is set to expand by 4.5% this year, according to the IMF report on Tuesday.
The hike of 0.3 percentage points from its October forecast was based on expectations of higher growth for India and China.
The 2024 forecast for China remains unchanged at 4.3% but the country’s better-than-expected performance in the first quarter may prompt an upward revision, the IMF said.
"The economic outlook for the Asia-Pacific region in the year 2024 is brightening. Currently, we anticipate that the economies of this region will experience a slightly milder slowdown than previously anticipated, primarily due to sustained downward pressure on inflation," said Krishna Srinivasan, director of IMF Asia-Pacific.
The IMF also highlighted Thailand’s falling inflation, attributing it to a downward trend in consumer goods prices as well as expansion of energy price subsidies. Lower prices would eventually stimulate demand leading to a return to positive inflation territory, it added.
