Thailand’s economy forecast to grow by 4% next year

The Thai national economy is expected to grow by 4% next year, thanks to the limited impacts of the COVID-19 pandemic in many countries, the recovery in tourism under the “Test and Go” program and export growth, according to a forecast by the Fiscal Policy Office at the Finance Ministry.

Ministry Spokesman and Director of the Fiscal Policy Office, Pornchai Theeravet, said today (Friday) that originally projected growth of 1% for the whole of last year has been increased to 1.2%, thanks to an increase in exports, other economic stimulus packages and the improvement in the COVID-19 situation following mass vaccinations.

The country saw 0.2% expansion in consumption by the private sector for last year, with private sector investment increasing by 3.7% and exports by 19% which, collectively, contributed to the improved growth rate for last year, said Pornchai.

As for this year, private sector’s consumption is projected to grow by 4.5%, while exports are expected to increase by 3.6% in line with global economic recovery and tourism expansion, with about seven million tourists expected to visit Thailand.

Pornchai said that government’s economic policies will continue to play an important role in stimulating economic growth, citing spending from the 3.1 trillion baht budget for the 2023 fiscal year, including 307 billion baht investment budget for state enterprises and the remainder of the 500 billion loan.

Public sector consumption and investment are expected to grow 1.2% and 3.7% respectively, he said, adding that support from the measures of government sector will help boost private sector’s confidence and investments expected to grow by 5% for the whole year.

Inflation this year is forecast to be about 1.9%, which is within the range projected by the government and the Bank of Thailand.

Pornchai warned, however, that there are factors which may impact the Thai economy, which will need close monitoring. These include the uncertainty of COVID-19 situation, global economic and financial fluctuations and the prospect of an interest rate increase by the US Federal Reserve.

Household debt and limitations in the supply chain, such as shortages of semi-conductors, high energy prices and labour problems still pose a risk, he added.