Thai finance minister says wants to beat govt forecast of 3% growth in 2025
4:32 am Thursday, October 31st, 2024
By Orathai Sriring and Kitiphong Thaichareon
BANGKOK (Reuters) -Thailand’s economic growth rate is expected to increase to 3% in 2025, supported by spending, exports, investment and tourism, the government said on Thursday, and the finance minister said he was already working to beat that forecast.
Southeast Asia’s second-largest economy is seen growing 2.7% this year, the finance ministry said, a solid increase from 2023’s subdued 1.9% expansion.
“The growth trend is still ongoing. The government is trying everything to drive the economy,” Finance Minister Pichai Chunhavajira told reporters at a business event.
“Hopefully, next year it will approach its potential, which is close to 3.5%.”
The government was also planning soft loans worth 55 billion baht ($1.6 billion) to support the housing market, he added.
The growth forecasts come two weeks after the Bank of Thailand unexpectedly cut its key interest rate, something the government had been calling for all year as needed to support expansionary fiscal policy and spark economic activity.
“Monetary policy must play a part in economic expansion,” Pornchai Thiraveja, head of the finance ministry’s fiscal policy office, told a news conference.
“There is limited fiscal space … to grow at 3.5% we must consider quasi-fiscal measures,” he said when asked what was needed to exceed the 2025 growth forecast.
The ministry said annual GDP growth in the third quarter was expected to come in below 3%, but would accelerate to above 4% in the final quarter of 2024.
Separately, the BOT said the economy lost some pace in September from August after exports and private consumption slowed, but overall growth in the July-September period increased from the previous quarter.
Third quarter GDP data is due on Nov. 18.
The strength of the baht against the dollar this year this year has raised concerns about the impact on the competitiveness of exports and tourism. The ministry saw the baht averaging between 34.8 and 35.4 per dollar this year, and between 32.7 and 33.1 per dollar next year.
Tourist arrivals are expected to reach 36 million this year and then 39 million in 2025, close the record of nearly 40 million visitors set in 2019.Exports this year were seen growing 2.9%, stronger than a previous forecast of 2.7%, and then 3.1 % in 2025.
Earlier this week, the Finance Ministry and BOT agreed to maintain the current inflation target of 1% to 3% for next year.
($1 = 33.71 baht)
(Reporting by Orathai Sriring, Kitiphong Thaichareon and Thanadech Staporncharnchai; Writing by Chayut Setboonsarng; Editing by John Mair)
