Standard Chartered Bank (Thailand) economists stated that the trend of the Thai economy in the second half of 2023 will recover from domestic consumption and tourism. But many impacts from the first half of the year cause the growth rate in 2023 to be only 3.3 percent, from the previous forecast that the Thai economy in 2023 will expand up to 4.2 percent. Many factors still need to be followed, including inflation. How long will the policy interest rate be stable? But next year, the chance that the Thai economy will grow by 4.5 percent is very possible.
Dr. Tim Leelahapan, Economist of Standard Chartered Bank (Thailand), said Standard Chartered Bank expects the Thai economy to grow 4.3 percent in the second half of 2023 as the political outlook is clear. climb together with policies to encourage ease of use and increased number of tourists It is expected that the Bank of Thailand (BoT) will maintain the policy interest rate at least until the end of 2025, with inflationary pressure being a variable.
However, the Thai economy is still in a period of economic expansion even in the recent past. The Thai economy recovered more slowly than expected. But now we have a new government. Domestic consumption is expected to help drive the economy. This was followed by an acceleration in the tourism sector recovery during the first 8 months of this year. There are more than 17.5 million tourists traveling to Thailand, with an average of 2.2 million arrivals per month as the tourist season is entering. The Bank expects the number of tourists to increase to 3 million per month from the end of September. Therefore, throughout the year there will be about 30 million tourists traveling to Thailand.
Before the outbreak of COVID-19 The number of tourists was at nearly 40 million people in 2019 due to the overall economy. The world still has many uncertainties. Standard Chartered Bank therefore downgraded Current account balance is forecast from 3.6 percent to 1.5 percent of DP. Fiscal year deficit is expected to be 4.0 percent of GDP in 2024 from 3.8 percent of GDP in 2023.
As for the disbursement of the 2024 budget, it is likely to be delayed, while what is the direction of the policy to stimulate the economy as the Pheu Thai Party has campaigned? It's probably something that needs to be monitored. and reflected from the country's latest economic figures. The Bank has lowered its economic growth forecast for Thailand in 2023 from 4.2 percent to 3.3 percent. It expects the economy to grow at 4.2 percent in 2024 from the previous estimate of 1.5 percent. For this reason, there has been a change. This year's core inflation has been reduced to 1.3 percent from the original expectation of 1.7 percent. Core inflation is expected to be at 1.5 percent in 2024 from the original expectation of 1.3 percent, while remaining constant. General inflation is expected in 2023 at 1.4 percent. The Bank is still concerned about risk factors for next year, namely the global economic problem, which is likely to grow below 3 percent. It is expected that inflation will rise to 2 percent. 1 From the oil situation, it may return to rise. Meanwhile, the baht at the end of the year is likely to compete at 34 baht per US dollar. While the export numbers are still negative, whether it will be more or less remains to be seen whether Thai exports will expand during the remaining period or not.
However, the gradual economic recovery Coupled with fiscal uncertainty and general inflation that has been low in the past, it is likely that there will be no increase in the policy interest rate. There is still risk in the A-border market. Therefore, a reduction in the policy interest rate is likely. It hasn't happened in the next 2-3 years, but there may be talk of raising the interest rate again in the last quarter of the year. This is especially true if inflation accelerates faster than expected. Additionally, fiscal policy and a clearer recovery in the tourism sector should provide more clarity on the direction of policy interest rates. And the Bank will probably keep an eye on the announcement of the 10,000 baht digital policy that the government will issue. It is still not clear how it will come out and where the money will be used. Therefore, we cannot evaluate much at this time.
Source: Thai News Agency