Thai business group cuts 2024 GDP growth forecast to 2.2%-2.7%

1:50 am Wednesday, May 08th, 2024

BANGKOK (Reuters) – Thailand’s economy is expected to grow 2.2% to 2.7% this year, down from a previous forecast of 2.8% to 3.3% due to a slow export recovery, a leading joint business group said on Wednesday.

Exports, a key driver of the Thai economy, are now projected to increase 0.5% to 1.5% this year compared with a rise of 2% to 3% seen earlier, said the Joint Standing Committee on Commerce, Industry and Banking, which includes representatives from those sectors.

In the first three months of 2024, exports fell 0.2% year-on-year, commerce ministry data showed.

Southeast Asia’s second-largest economy grew 1.9% last year, lower than 2.5% growth in 2022, lagging regional peers as it confronts high household debt and borrowing costs alongside China’s slowdown.

Last week, the finance ministry reduced its 2024 economic growth forecast to 2.4% from 2.8%, but said growth could still reach 3.3% if the government’s 500 billion baht ($13.5 billion) household stimulus plan launches in the fourth quarter as planned.

The tourism sector, also a important driver of growth, is expected to see 35 million foreign arrivals this year, unchanged from a previous forecast, the business group said.

“Tourism is a factor that is clearly recovering,” Kriengkrai Theinnukul, chair of the Federation of Thai Industries, told a media briefing.

The government is aiming for a record of 40 million foreign visitors this year. From Jan. 1 to May 5, Thailand received about 12.6 million foreign visitors, up 39% year-on-year, with Chinese tourists at about 2.5 million, government data showed.

The business group said a government plan for a minimum wage hike would hurt the economy and investment, and it would send a letter to the labour ministry asking to reconsider the move.

Prime Minister Srettha Thavisin has defended his plan to introduce a nationwide daily minimum wage of 400 baht ($10.8) as necessary to boost growth, as business groups expressed concern about the impact of higher wage costs.

($1 = 36.98 baht)

(Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by John Mair)