The Kasikorn Research Center has maintained its GDP growth estimate for 2024 at 2.6%, expecting higher growth in the second half of the year compared to the first half. It advises monitoring the immediate impacts of flooding and the slowdown of the main economy, while the U.S. election will influence the direction of a new wave of trade wars, which may not benefit Thailand significantly.

Mr. Burin Adulwattana, Managing Director and Chief Economist of Kasikorn Research Center Co., Ltd. stated that the Fed recently cut interest rates by 0.5% in its last meeting, more than expected, and signaled another 2% rate cut by 2026, marking the beginning of a downward interest rate cycle. Meanwhile, China's economy may grow below the target of 5% in 2024 due to the ongoing real estate crisis, and the Chinese government has yet to implement clear domestic economic stimulus policies, alongside facing trade barriers from the West. In Europe, Germany's economy shows signs of vulnerability, and geopolitical conflicts are increasing uncertainty for businesses in Europe. A key issue to watch is the U.S. presidential election, as it will affect trade, investment policies, and international relations.

Ms. Natthaporn Treeratnasilkul, Deputy Managing Director of Kasikorn Research Center Co., Ltd. elaborated on the global geopolitical issues creating uncertainty for the Thai economy, viewing it as both an opportunity and a risk. The opportunity arises from Thailand's central position, while the risks stem from the impacts of global trade barriers and intensified competition. However, if a Trade War 2.0 occurs, the U.S. may impose a 60% tariff on imports from China and 10-20% on imports from other countries, likely leading to another wave of production relocation from China, especially for labor-intensive goods that were not taxed in Trade War 1.0, with Thailand potentially benefiting little.

Ms. Kewalin Wangpichayasuk, Deputy Managing Director of Kasikorn Research Center Co., Ltd. believes that global geopolitical issues will increase pressure on the Thai industry in the near future, particularly in manufacturing, such as electric vehicle production in Thailand, which may face overproduction as reliance on exports is uncertain and domestic markets may not grow as much as expected.

Additionally, Ms. Thanyalak Watcharachaisurapol, Deputy Managing Director of Kasikorn Research Center Co., Ltd. added that as global geopolitical issues remain prolonged, along with ongoing political instability worldwide and a downward trend in global interest rates, safe-haven assets like gold are expected to continue receiving support, having recently reached new record highs. However, investors should be aware that asset volatility has also increased, especially post-COVID, necessitating caution in investments and effective risk diversification.

For the economic outlook for the remainder of 2024, the Kasikorn Research Center maintains its Thai economic growth forecast at 2.6%, supported by the recovery of exports, tourism, and government economic stimulus measures. The Thai economy in the second half of 2024 is expected to grow faster than in the first half due to export and investment base factors, the high season for tourism, and government stimulus measures. However, the impacts of flooding, the slowdown of the global main economy, and weakened domestic demand remain risks for the Thai economy moving forward.

In terms of the Thai industry, it is expected to face challenges from four main issues in the remaining months of the year: 1. Flooding, with impacts likely to worsen if the situation escalates in central and southern regions; 2. High currency volatility; 3. Competition with foreign products; 4. Rising costs, particularly from minimum wage increases. These four issues affect agriculture, manufacturing, and services, primarily impacting SMEs. For the entire year of 2024, it is estimated that the automotive, housing, and construction sectors will struggle due to shrinking income indicators.

In the financial sector, the main challenge remains household debt, which is expected to keep the household debt-to-GDP ratio near 90% over the next 1-3 years, limiting opportunities for new loan growth. Thai bank loans are projected to grow no more than 1.5% this year amid declining borrower creditworthiness. A survey on household debt for Q3 2024 found that over half of respondents with home or car loans have faced repayment issues, leading them to enter debt restructuring programs with financial institutions. This problem is linked to low income levels and limited savings, making them more vulnerable than other borrower groups. The survey also revealed that 8.2% of respondents rely on informal debt and seek assistance with debt restructuring, financial planning, and increased access to new loans within the system, alongside sustainable solutions to enhance income stability for borrowers.