Higher govt spending, export rebound expected to boost Thai GDP growth


Increasing government spending, higher public consumption as well as private investment could boost Thailand’s gross domestic product (GDP) growth in 2024 to 2.7 to 3.7 per cent, the National Economic and Social Development Council (NESDC) said on Friday.

NESDC secretary-general Danucha Pichayanan said the council expected government spending to go up after the budget bill for fiscal 2024-25 come into effect. Meanwhile, public consumption and private investment will also expand due to the improving economy after the Covid-19 crisis, leading to the recovery of tourism and service industries.

The NESDC estimated that the export sector in 2024 would expand 3.8% year on year, as a result of more free trade agreements that would be negotiated with trade partners next year.

Danucha said external factors that could affect Thai economy next year included geopolitical tensions in several areas, which would result in the overall global economy expanding by 2.7%, lower than this year’s 2.8%. The NESDC, however, forecasts that the volume of global trade in 2024 will expand 3.2% year on year, compared to 2.1% this year.

The council forecasts that the economy of China, Thailand’s largest trade partner, will expand at a lower rate next year, by 4.3%, compared to 4.9% this year. Contributing factors to this deceleration include increasing debts in the property sector and decreasing domestic consumption, which put China at risk for deflation. It remains to be seen if the Chinese government would roll out economic stimulus measures to fix the problem, said Danucha.

“Oil prices in the global market are falling to around US$70 per barrel, from $80-90 earlier,” said Danucha. “This trend is in line with other commodity products, such as natural gas, which did not see much jump despite Europe entering winter. It signals an underwhelming expansion of the global economy next year,” he said.