Reviving tourism sector expected to fuel 3.2% growth in Thai economy

Thanawat Polvichai, rector of the University of the Thai Chamber of Commerce (UTCC), made this projection on Tuesday but said it does not factor in the potential impact of the government’s ambitious digital wallet scheme.

The scheme aims to distribute 10,000 baht of digital money to eligible Thais aged 16 and above within this year.

Thanawat, who is also chief adviser to the UTCC’s Centre for Economic and Business Forecasting, said the government’s economic stimulus campaign is expected to inject some 400 billion to 500 billion baht into the economy. This injection, he said, could further elevate GDP expansion to a range of 4.2% to 4.5%.

The scheme’s implementation, however, remains uncertain as it is contingent on parliamentary approval for funding through a 500-billion-baht loan act.

UTCC’s forecasting centre predicts a 1.7% expansion in government investment and a 3.4% year-on-year growth in the private sector this year. The export and import sectors are projected to expand by 3% and 3.8%, respectively, while headline inflation will grow by 2%, up from the 1.3% forecast for 2023.

A significant contributor to the country’s positive economic outlook is the expectation of 1.48 trillion baht in income from approximately 35 million foreign arrivals.

However, the UTCC cautioned that 2024 may face potential challenges from expanding geopolitical tensions, the debt situation of Thai households and the prospect of severe drought affecting agricultural output.

UTCC’s economic forecast is similar to that from the National Economic and Social Development Council (NESDC), which was published last week. The state-run council predicted a GDP expansion in the range of 2.7% to 3.7% thanks to increasing government spending, higher public consumption and enhanced private investment.