Thailand’s top economists pessimistic about growth in 2024

Economists believe Thai GDP forecasts should be lowered due to a decline in domestic investment, citing the National Economic and Social Development Council’s report that the Thai economy expanded by just 2.3% year on year in the second quarter.

Second-quarter investment dropped by 6.2%, driven by a decline in private investment in transport, capital goods and construction.

Somprawin Manprasert of Siam Commercial Bank's Economic Intelligence Centre, painted a gloomy picture for the second half of 2024, saying he expects the country’s economy to fall further in response to the global economic slowdown.

He said the centre would cut this year’s GDP forecast of 2.5% expansion due to a significant decline in private investment, which reflects a decline in production. Although production for domestic consumption has expanded, production for export has dropped.

“The figures show that Thailand’s competitiveness is declining,” he said, adding that the Thai economy could expand by just 1% this year.

He said Thailand needs measures to stimulate domestic investment rather than consumption. He expects the Bank of Thailand’s Monetary Policy Committee to maintain the policy interest rate at 2.5%, but hoped it would be lowered at the end of the year.

Pipat Luengnaruemitchai of Kiatnakin Phatra Financial Group said the decline in economic expansion has come as many industries faced difficulties in business expansion, especially the automobile, electronics and petrochemical industries.

He pointed out that a slowdown in loan growth is impacting Thai economic expansion, noting that it could affect other industries rather than property and durable goods.

“A significant decline in investment will affect Thai GDP this year, especially investment in the property sector,” he said, adding that the Thai economy could drop further in response to a decline in global economy and domestic investment.

Amonthep Chawla of CIMB Thai Bank, said the 2.3% Thai economic expansion is the lowest in ASEAN.

Although private consumption, tourism and public expenditure still support economic growth, he said a sharp fall in private investment could cause the economy to recover slowly.

He added that the influx of Chinese products would impact Thai entrepreneurs’ confidence in investment and trade competition.

“The public sector should follow the decline in investment closely,” he said, adding that the government should assist small and medium entrepreneurs in the manufacturing sector which could face more issues.

He expects the MPC to lower the policy interest rate on August 21. “But even if it doesn’t, it can be reduced later as the global interest rate is likely to drop and inflation is no longer a worrisome factor,” he added.