UTTC cuts Thailand’s growth forecast this year to 2.6 per cent

Thai economy in the first quarter is projected to expand by only 2 per cent (Photo:thaipbsworld.com/)

Bangkok - The Centre of Economic and Business Forecasting of the University of the Thai Chamber of Commerce (UTTC) on March 19 forecast that Thailand’s economic growth for 2024 would be 2.6 per cent, down from its earlier projection of 3.2 per cent due to the fragile economic recovery, a slowdown in private investment, the weak purchasing power of the consumers and delayed disbursement of the 2024 budget.

Thanawat Phonvichai, UTTC rector and head of the centre, said that the Thai economy in the first quarter is projected to expand by only 2 per cent and only two sectors, tourism and exports, have enjoyed continuous growth.

He said that the economic situation is expected to pick up in the second quarter to 2.5 per cent, thanks to the disbursement of the national budget and continued recovery of the tourism sector and exports, adding that the recovery is fragile and is concentrated in certain export sectors, such as the export of rice, rubber and fruits.

Although some consumer confidence has returned, it is still low. Many consumers are still feeling the pinch of the impacts of the COVID pandemic and higher interest rates, said Thanawat.

Meanwhile, Vichien Kaewsombat, assistant director of the centre, said that economic recovery will become more evident in the third quarter with growth expected to be 3.1 per cent because lending rates are expected to decline, in line with the anticipated Monetary Policy Committee’s decision to lower the policy rate.

Growth in the fourth quarter is forecast at 2.8 per cent, due to the high level of household debt which will result in an increase of non-performing loans, making financial institutions more cautious in extending loans.

He also said, however, that there is a possibility that growth for the whole year may increase to 3 per cent if the disbursement of the 2024 national budget can be accelerated and the “digital wallet” scheme is approved quickly.

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