Thailand’s GDP growth in 2023 comes in at 1.9% on the back of weak export figures

by Daryl Lum | Feb 19, 2024 | Bangkok Property Market Updates, Investment Analysis

Official data released on Monday indicates that the Thai economy experienced a 1.9% expansion in 2023, marking a deceleration from the revised 2.5% growth observed in the preceding year. This downturn is attributed to lackluster exports.

According to the National Economic and Social Development Council (NESDC), a government agency, the gross domestic product for the October-December quarter exhibited a 1.7% increase from the previous year. This surpassed the 1.5% growth witnessed in the July-September quarter, with robust tourism and heightened consumption being the contributing factors.

A recent economist poll by Reuters had initially projected a 2.4% growth for the entire year and 2.5% for the fourth quarter. In contrast, the NESDC had projected a 2.5% growth for the full year in November.

The underwhelming performance of the Thai economy in the past year underscores the impact of weak global demand on export-oriented economies in Southeast Asia. Malaysia, Singapore, and Vietnam all recorded slower growth in their annual GDP figures, attributed to the global economic slowdown, central banks’ monetary tightening, and a downturn in China, the primary trade partner for many countries in the region.

Looking ahead to 2024, the NESDC downgraded its forecast, anticipating the economy to grow between 2.2% and 3.2%, compared to the previous projection of 2.7% to 3.7%. This contrasts with private sector economists’ recent projections ranging between 3.6% and 4.1% for the year. They attribute the anticipated acceleration to an improved export outlook, increased household consumption, and augmented government spending. Foreign tourist numbers are also expected to contribute to the growth.

Enrico Tanuwidjaja, an economist at UOB’s research centre, stated, “The 2024 growth would be supported by a sustained rebound in foreign demand for Thai goods and services, resilient private consumption, and fiscal stimulus driven by political and macroeconomic stability.” However, he cautioned that geopolitical conflicts, a more abrupt-than-expected global economic slowdown, and uncertainties surrounding China’s economic recovery could potentially derail the projected recovery.