Kasikorn Research Center has revised its economic forecast for Thailand in 2023 down to 2.5% from 3.0% due to the ongoing impact of the global economic slowdown, particularly from China's real estate issues.

Mr. Burin Adulwattana, Managing Director and Chief Economist of Kasikorn Research Center stated that the global economy continues to slow down, affecting global trade, as reflected in the manufacturing sector's slowdown worldwide, especially in China and Germany, which are heavily reliant on exports. Additionally, China is still facing real estate challenges, negatively impacting domestic demand. Meanwhile, the U.S. Federal Reserve assesses that the economy is still expanding well, leading to a likelihood of maintaining high interest rates in 2024, even though financial markets anticipate a chance for the Fed to start lowering policy rates in the first half of 2024.

Thailand's economy is expected to grow below expectations, with Kasikorn Research Center revising its growth forecast for 2023 to 2.5% from 3.0%. The ongoing global economic slowdown, particularly in China, is impacting the anticipated number of tourists, projected to be only 27.6 million in 2023. Although exports are expected to contract less than previously estimated at -1.3% (down from -2.5%), domestic demand continues to be affected by the slow recovery of tourism, ongoing manufacturing slowdown, and high household debt, as evidenced by several consecutive months of declining domestic car sales and core inflation remaining below the Bank of Thailand's target. Kasikorn Research Center anticipates that the Bank of Thailand has concluded its interest rate hike cycle at 2.5%.

In 2024, Thailand's economy is expected to grow by 3.1%, driven by government investment and spending, along with an anticipated 2% growth in exports. The number of tourists is projected to increase to 30.6 million from 27.6 million in 2023. With the implementation of Digital Wallet measures, Thailand's economy could grow by 3.6%. The inflation rate is estimated to be at 0.8%, with average oil prices expected to be $72.5 per barrel next year.

In the context of intensified global trade barriers and the automotive industry undergoing a transformation towards more popular electric vehicles, there are opportunities for Thailand to develop into a regional hub for electric vehicle production. Additionally, Thailand is likely to benefit from the relocation of production bases in other industries, such as electronics, which will provide new machinery to drive the economy in the near future.