The Thai economy in 2024 is expected to continue its slow recovery and grow below expectations. The Bank of Thailand has revised its GDP forecasts for 2023 and 2024 down to 2.4% and 3.2%, respectively. However, the inclusion of the Digital Wallet project could potentially raise the GDP for 2024 to as high as 3.8%. The tourism sector, which was a major driver of the Thai economy before the COVID-19 pandemic, remains a concern. Currently, Thailand has the highest number of tourists from Malaysia, reaching 4 million in November 2023, but this figure is only 8% higher than the number of tourists in November 2019, before the pandemic. Additionally, the significant drop in Chinese tourists, down more than 30% compared to pre-pandemic levels, is a contributing factor. Various challenges, including a slowing Chinese economy, prolonged negative inflation, and ongoing real estate crises, have significantly reduced purchasing power and the desire to travel abroad. These factors pose challenges that may result in the number of tourists in 2024 not exceeding 39.9 million, similar to the pre-pandemic period.

Regarding exports, data from the Trade Policy and Strategy Office of the Ministry of Commerce indicates that although the export value in the first ten months of 2023 contracted by 2.7% compared to the previous year, there are signs of improvement due to the recovery of the electronics cycle. Thailand has the highest share of electronic equipment exports compared to the total industrial export value. The total export value of all products in October 2023 also grew by 8% compared to the same period last year.

However, one of the significant factors contributing to the economic slowdown is the household debt problem. According to the Bank of Thailand, the country faces a household debt level of 90.9% of GDP in the third quarter of 2023, amounting to 16.2 trillion baht, which has weakened consumer purchasing power.

The inflation rate in Thailand in December was -0.83%, marking three consecutive months of negative inflation and the highest decline in 34 months, raising questions about whether Thailand is experiencing deflation. One of the main reasons for the decrease in inflation is the government's energy measures that have reduced prices for energy products, such as diesel and gasohol, along with lower food prices compared to the previous year. However, some products still have high prices amid the negative Consumer Price Index (CPI) changes due to last year's high base.

Nonetheless, Deloitte believes that the Thai economy will continue to be driven primarily by private consumption and tourism for GDP growth in 2024. Private sector investment will further promote economic growth, such as investments in electric vehicle manufacturing plants from China in Thailand, including Changan, GAC, GWM, and Rever. Additionally, data from the Board of Investment indicates that investment promotion certificates issued in the first nine months of 2023 increased by 0.4% compared to the same period last year, with the electrical and electronics industry having the highest value at 130.4 billion baht, and investment promotion applications increased by 22% compared to the first nine months of 2022.

Recently, we have seen the trend of accelerated computing, which drives significant advancements in AI technology, showcasing the full potential of organizations that must learn how to leverage AI. AI will enhance company productivity, improve products and business models, and directly impact the overall economy.

The emergence and rapid development of Generative AI have unlocked the potential for new applications in various markets, resulting in increased productivity. Over the past year, we have witnessed the unexpected capabilities of Generative AI, such as ChatGPT, which uses data from GPT-3 and is now utilizing GPT-4. The significant difference lies not only in the increased volume of data but also in the types of data that can be input or generated, which have greatly evolved from supporting only text to now including images and audio as input data in Generative AI, as clearly demonstrated by Google Gemini. Furthermore, it can generate diverse outputs for users, including text, images, and various video clips.

AI will transform work patterns in the future in various ways, starting from human labor. Previously, IQ was the measure of success in work, but as AI takes on roles traditionally held by humans, the measure of success will shift to EQ, perspectives, attitudes, and soft skills. Everyone will need to develop themselves to learn how to utilize AI effectively. It can be said that we may not lose our jobs to AI, but those who know how to leverage AI will be the ones competing for our job positions.

It is important that we view AI as a collaborative partner that will help enhance work efficiency. AI is like a "co-pilot" that not only automates tasks but can also perform basic and repetitive tasks at scale, such as gathering data from various sources. Deloitte refers to this era as The Age of With, where humans and artificial intelligence work together towards greater success.

According to the CEO Survey conducted by Deloitte in collaboration with Fortune magazine in June and October 2023, Generative AI is no longer just a buzzword among CEOs; it is becoming a reality. Many CEOs have transitioned from evaluating and experimenting with its use to implementing it widely. GenAI is being utilized in various forms, such as enhancing operational efficiency, reducing business operational costs, discovering new insights, and accelerating the emergence of new innovations.

Additionally, Deloitte's recent article on AI, titled The Generative AI Dossier, presents interesting trends in usage and applications across various industries that will enhance work efficiency, promote creativity, and accelerate business innovation processes. It highlights the consideration of AI applications in various forms, including enhancing developer productivity, fraud detection, improving supply chain management systems, smart factories, and more, which are expected to yield significant benefits.

As Generative AI evolves positively, ethical, legal, and policy issues must be considered when applied commercially. Deloitte is committed to using Generative AI safely and responsibly for society, adhering to the Trustworthy AI framework, which helps develop necessary safeguards while emphasizing ethical considerations during product development and operation.

By Dr. Nareen Chutijirawong | Executive Director - Clients & Markets

Thatsada Saengmanacharoen | Senior Consultant - Clients & Markets
Deloitte Thailand