Siam Commercial Bank (SCB EIC) expects the Thai economy to grow higher in the fourth quarter of 2023 than the previous first three quarters. The main supporting factor comes from private consumption. Which is likely to expand well after the strong recovery in the labor market, including the consumer confidence index, which continued to rise. In addition, foreign tourists are traveling to Thailand and the trend is clearly accelerating this quarter. After starting to enter the peak season, especially tourists from Asia and Russia. Moreover, merchandise exports have begun to recover. Positive growth in the fourth quarter will be due to higher export prices in some product groups, such as agricultural products, and lower fundamental factors.
However, the SCB EIC expects that this year’s GDP is likely to fall below the original estimate of 3.1% according to the economic data released. Much weaker than expected
“The latest forecast for Thailand’s economic growth rate in 2023 is 3.1% (expected as of September 2023). The SCB EIC is in the process of assessing the economic impact in various areas before publishing the new economic forecasts. In the monthly SCB EIC in November, the analysis stated that the 2023 release will be released this week. .
As for the economic outlook in 2024, it will be able to grow at an accelerated pace. But the recovery trend is fragile due to the uncertainty surrounding it. With the supporting factors being the number of foreign tourists likely to continue to recover to 37.7 million, exports have recovered to be positive. And private investment that will expand better This follows the trend of investment approvals for the Board of Investment (BOI) and government sector momentum in the first half of the year. There won’t be much compared to the second half of the year. From delaying the announcement of the budget law for 2024
The SCB EIC sees the Thai economy in 2024 still facing low risks
(1) The war between Israel and Hamas, even in the basic case, will have little impact on the Thai economy. But if the situation becomes serious the global economy, including Thailand’s, will be affected by global oil prices. Increased volatility in global financial markets.
(2) The Chinese economy, which tends to expand less, may affect Thai exports. Especially products that rely heavily on the Chinese market. It is part of the Chinese production chain
(3) The effects of the drought crisis in many regions may be more pronounced. As a result, off-season production of important economic crops such as rice and sugarcane is likely to decline somewhat.
* Concerned that the “digital wallet” policy will make the Thai economy “profitable” and not worth the “loss”
In addition, the Thai economy continues to face uncertainty regarding fiscal policy. Especially digital wallets, although this project has more clarity regarding the issue of rights holder, size limit, and source of funds. Including the scope of spending and types of eligible products. But there is still legal uncertainty. Impact on the economy and financial sustainability
If the project can actually be implemented according to the SCB government’s announcement, EIC estimates that the digital wallet will temporarily stimulate the Thai economy to expand above its potential level. But after that, the Thai economy will return to expanding according to its original potential. Having to trade at high financial costs from using large sums of government funds to stimulate the economy in the short term but its impact leads to undermining financial sustainability in the long term.
“This may lead to public debt and the debt ceiling exceeding 70% of GDP faster than without this project. Including the impact on the financial sphere. Which will be used to support future uncertainty and financial stability of the country,” the analysis said.
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