Krung Thai Bank projects 3.8% economic growth for 2022, marking the beginning of economic recovery, urges businesses to adapt to the 'GROWTH' concept to accelerate Thailand's economy.

Krungthai COMPASS Research Center of Krung Thai Bank forecasts that Thailand's economy will grow by 3.8% in 2022, up from just 1.0% in 2021. The spread of the Omicron variant of COVID-19 is not expected to significantly impact global and Thai economic growth. Exports are expected to continue growing despite high costs and raw material shortages. The domestic economy is showing signs of improvement as the government relaxes pandemic control measures and opens the country to foreign tourists. The year 2022 is seen as a turning point towards development in the New Normal era.

Dr. Patcharaporn Nantharamat, Assistant Managing Director of Krungthai COMPASS at Krung Thai Bank, stated that Thailand's economy in 2022 will clearly return to a recovery path. Widespread vaccination coverage in many countries, along with behavioral adjustments to coexist with COVID-19, will help maintain the momentum of global economic recovery, allowing Thai exports to continue growing. Domestic demand in Thailand is also expected to improve, following the overall economic activities that have been recovering since the fourth quarter of 2021. However, several challenging factors may delay the return of the Thai economy to pre-COVID-19 levels until 2023.

“Although the Thai economy will show clearer recovery next year compared to the previous year, it is still growth following a significant downturn due to the pandemic. There is vulnerability due to uneven recovery (K-Shaped Recovery) and high debt levels, meaning the Thai economy will not return to pre-crisis levels and will still rely on monetary policy easing and fiscal stimulus to create momentum,”

Dr. Mana Nimittawanit, Director of Krungthai COMPASS at Krung Thai Bank, said, “The government should focus on additional economic relief spending in three main dimensions: 'filling the old holes - boosting purchasing power - restructuring businesses' to alleviate the impact of lost income in the labor market, especially for employment in the service sector, which is expected to recover more slowly than other sectors. This includes integrating measures that stimulate purchasing power in the form of co-payment assistance that has a high multiplier effect on the economy, as well as supporting and strengthening businesses to withstand risks and compete in the New Normal era. Monetary policy is expected to remain accommodative, as the Monetary Policy Committee has clearly signaled that it will use monetary policy to support economic recovery, leading to an expected policy interest rate of 0.5% throughout the year.”

Mr. Kittisak Kwakijmane, Senior Analyst at Krungthai COMPASS at Krung Thai Bank added that this is an opportunity for businesses to reassess their strategies to promote recovery and move towards becoming winners in the future by leveraging the development trends in the New Normal era, leading to business restructuring. This includes focusing on investments that support the Green Economy, promoting high-value and sustainable tourism businesses in line with the reopening of the country, enhancing productivity through management strategy adjustments and human resource development amidst intensified global talent competition, and investing in future technologies. Additionally, health care businesses may need to adjust their operational models to accommodate long-term coexistence with COVID-19. If businesses can fully capitalize on these trends, it will help accelerate the overall recovery of the Thai economy back to pre-COVID-19 levels and strengthen resilience against the risks of COVID-19 outbreaks and other uncertainties that may impact the economy in the future.