Macroeconomics/NESDC

Chatrudee Theparat

Thai economy is facing challenges in the coming year, especially risks from trade barriers from the US and internal factor from high household debt, according to National Economic and Social Development Council (NESDC).

Danucha Pichayanan, NESDC secretary general, said the government should drive export to secure its stronger expansion and prepare to mitigate the possible impact of such a trade barrier.

Danucha Pichayanan

The agency announced the Thai economy in the third quarter of 2024 expanded by 3% YoY, accelerating from 2.2 % in the previous quarter.

After seasonally adjusted, the economy increased by 1.2 % from the second quarter (%QoQ sa). In the first nine months of 2024, the economy grew by 2.3 %. The economic growth in Q3 was contributed by government investment, export, tourism and manufacturing.

Public investment expanded for the first time in six quarters. Export of goods and services and government consumption expenditure showed favorable growth. However, private consumption decelerated and private investments contracted.

Total investment increased by 5.2 %, marking the first expansion in four quarters and improving from a 6.1 % contraction in the preceding quarter. Private investment dropped by 2.5 %, continuing its decrease for the second consecutive quarter from a 6.8 % in the previous quarter.

In the first nine months of 2024, private consumption expenditure and government consumption expenditure increased by 5 % and 1.6 % respectively.

Thai economy in 2024 is projected to grow by 2.6 %

The Thai economy in 2024 is projected to expand by 2.6 %, improving from 1.9 % in the previous quarter. Headline inflation is estimated to be at 0.5 % and the current account is projected to record a surplus of 2.5 % of GDP.

The economy in 2025 is projected to expand in the range of 2.3 – 3.3 % (with the midpoint projection of 2.8 %). Key supporting factors include the increase in government consumption and investment, the growth of domestic private demand, the continual recovery of the tourism sector; and the continual expansion of export.

The agency projected 38 million of foreign visitors and generated 1.63 trillion baht next year.

Private consumption and investment are expected to increase by 3 % and 2.8 %, respectively. Export value of goods in US dollar term is expected to grow by 2.6 percent. Headline inflation is estimated to be in the range of 0.3 – 1.3 percent and the current account is projected to record a surplus of 2.6 percent of GDP.

Key growth components are private consumption expenditure is expected to increase by 3 % continuing from a growth of 4.8 % in 2024, the government consumption is projected to grow by 2.1 %. This was in accordance with an increase in the current budget framework under the FY2025 annual budget and the FY2025 carry-over budget.

Total investment is expected to increase by 3.9 % while export value of goods in US dollar is anticipated to increase by 2.6%, continuing from a 3.8 % increase in 2024, in line with the continual recovery of global trade volume. Together with the improving outlook of services exports, it is expected that the export quantity of goods and services will continue to increase by 4.2 %, compared with a 6.1 % in 2024.

Economic management for 2025

Mr Danucha said economic management for 2025 should prioritize on driving export to obtain stronger expansion while preparing to mitigate the possible impacts of escalating trade barrier measures by promoting the export of high-potential and globally demanded products, closely monitoring and evaluating the implementation of trade barriers that could impact Thailand's exportsใ

Enhancing the competitiveness of export-oriented production by boosting productivity through innovation and cutting-edge technology and encouraging the business sector to mitigate risks from exchange rate fluctuations, while facilitating and reducing export-related costs for businesses.

Protecting the manufacturing sector from dumping and unfair trade practices by improving the quality inspection process of imported products to ensure greater rigor and thoroughness. Improving the regulation and inspection of foreign digital platform businesses by expediting the requirement for foreign online operators to register as legal entities and establish offices in Thailand, enabling the government to supervise their operations.

Implementing a strict inspection and monitoring of market dumping and unfair trade measures from major exporting countries and facilitating business operators in accessing anti-dumping, countervailing-duty, and anti-circumvention (AD/CVD/AC) measures.

Strengthening enforcement against illegal importation, tax evasion, or exploitation of legal loopholes to benefit their businesses, along with enhancing Thai entrepreneurs and product standards.

The agency also suggested to stimulating private investment, assisting farmers in adapting their agricultural production and providing support to SMEs experiencing financial difficulties due to a continuous decline in credit quality by prioritizing income generation and enhancing their production.