Krungsri (Krungsri Ayudhya Bank Public Company Limited) forecasts that the Thai economy is likely to grow in line with the economic cycle, although growth remains uneven and uncertain. It is estimated that in 2024, the Thai economy will expand by 3.4%, excluding the impact of the digital wallet policy, with most momentum coming from domestic factors.

Dr. Pimnara Hirankas, Head of Economic Research at Krungsri Bank stated, "Krungsri Research predicts that the Thai economy will grow by 3.4% in 2024, excluding the effects of the digital wallet policy. Key domestic drivers include: 1) Continued recovery of the tourism sector, supported by government measures and improved capacity to accommodate tourists, with an estimated increase in foreign tourists from 27.7 million in 2023 to 35.6 million in 2024, although still below the pre-COVID level of 40 million. 2) Private consumption is expected to continue growing at 3.3%, bolstered by the recovery of the tourism sector and increased employment, along with positive effects from government policies aimed at alleviating the cost of living and stimulating spending. 3) Government spending will play a larger role in driving the economy starting in the second quarter of 2024, following the approval of the annual budget bill amounting to 3.48 trillion baht (an increase of 9.3% from the previous budget), leading to expected growth in public consumption and investment of 1.5% and 3.0%, respectively, after a contraction in 2023. 4) Private investment is expected to improve with a growth rate of 3.5%, driven by the growth of the service sector and infrastructure-related investments, as well as government policies promoting key industries.

However, the export sector is expected to grow slowly due to ongoing pressures from the weakness of trading partner economies. Thai exports are projected to grow by 2.5% in 2024, recovering from an expected contraction of -1.5% in 2023, influenced by specific factors such as the recovery cycle of electronic goods, benefits from food security measures, and regional economic cooperation.

The gradual recovery of domestic economic activities and rising production costs are expected to push inflation up from 1.3% in 2023 to 2.0%.

Regarding the policy interest rate outlook for 2024, Krungsri Research predicts that the Monetary Policy Committee (MPC) will maintain the rate at 2.50% throughout 2024 to manage inflation, which is expected to rise, within the target range and to support the recovery of Thai economic activities back to long-term trends, while also maintaining policy space to accommodate existing risks in the future.

Economic Forecast for Thailand in 2023-2024

Although the Thai economy is expected to improve in 2024, the growth rate remains low compared to other countries in the region. The IMF predicts that the GDP of the ASEAN-5 countries will grow by 4.5% in 2024, slightly up from 4.2% in 2023. Domestic factors that may pressure the growth of the Thai economy include high household debt amid rising borrowing costs, potential severe drought impacts, and structural issues such as an aging population, labor shortages, and declining competitiveness in several industries. External factors that may pose risks in 2024 include the impact of interest rates in several countries at their highest in over two decades, which could pressure the economy and financial sectors in major global economies, the slowdown of the Chinese economy amid vulnerabilities in the real estate sector, economic polarization between the US and China, and potential geopolitical conflicts that may escalate in the future.