Keep an eye on the 2024 Thai economy; slow growth, high household debt

New year, new beginning for people to have a new plan for their life or a start for a new business. However, one of the factors that may affect many of you is the economy which is about livelihood. Being aware will help us to be more prepared for future events.

This time, ACU PAY would like to take everyone to look at the economy direction analysis to know which direction our economy will be.

Keep an eye on the 2024 Thai economy

Let’s start with KASIKORN RESEARCH CENTER (KResearch) which estimates that Thailand’s economic growth this year will be 3.1 %. If combined with digital wallet projects, the growth will be 3.6 % from the year 2023 that estimated GDP growth of 2.5%. However, the market sees the probability that the Thai economy will enter a recession increases from 5% to 15%.

It said that the Thai economy has grown slowly over the past 10 years due to a lack of private-sector investment. It can be seen from last year that foreigners sold Thai shares because private-sector investment declined by 18% per GDP, while earnings per share grew by 6.7% which is lower in comparison with the past and neighboring countries.

Therefore, it is important to change the economic structure. If Thailand only has measures to revive the economy, it can only be done in the short term. The best solution is to restructure and create long-term growth.

Let’s continue with the Bank of Thailand (BOT) which revealed that the Thai economy continued to recover, with GDP growth of 2.8% in 2023 and 4.4% in 2024. Growth next year will be higher by many driving forces, including stimulus packages and infrastructure investment which are expected to increase. It is expected that those driving forces will make private-sector invest more and exports are expected to recover from a low base this year which is estimated at 4.2% in 2024, as well as domestic demand that continues to expand.

Siam Commercial Bank Economic Intelligence Center (SCB EIC) revealed that the Thai economy is likely to continue growing in the first quarter of this year, driven mainly by private consumption following improved consumer confidence, cost-of-living reduction measures, and the Easy e-receipt program to stimulate spending. However, the positive effects of projects may not be as great as in the past due to limited conditions for e-Tax Invoice stores. Meanwhile, tourism and exports have resumed growth. Therefore, it is expected that Thailand’s GDP this year will reach 3.0%.

In this regard, there are two main positive factors:

  1. Exports have recovered from the rising trend of global trade.
  2. Private-sector investment recovered well in line with the trend of investment promotion applications and government promotion policies.

As for Thai inflation, SCB EIC estimates that Thailand has not yet entered a deflationary phase due to negative inflation has not yet spread widely. However, the problem of Thai household debt remains high, and fragile group income is recovering slowly. 

The fragile group tends to be low-income and non-regular workers who cannot access social security together with poor debt management. Thus, they are highly dependent on non-performing loans and tend to be in that cycle for a long time. It requires short-term policy to add more liquidity and resolve debt for vulnerable households along with a long-term policy such as strengthening one’s finances.

Overall, the global economy is facing many challenges, including uncertainties from interest rates at central banks around the world, inflationary pressures, conflicts and wars in many countries may also affect global trade.

Here are all of the analyses and forecasts of the Thai economy in 2024 that Thais should be prepared to cope with.

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ACU PAY Thailand

ACU PAY Thailand

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