Thailand’s GDP is now projected to grow between 2.2% and 2.7% this year, a reduction from the earlier forecast of 2.8% to 3.3%, due to a sluggish export recovery, according to a prominent joint business group on Wednesday.

 

Exports, a crucial component of Thailand’s economy, are now expected to rise by 0.5% to 1.5% this year, down from the previously anticipated 2% to 3% increase, reported the Joint Standing Committee on Commerce, Industry and Banking, which represents these sectors.

 

Commerce ministry data revealed that in the first quarter of 2024, exports decreased by 0.2% year-on-year.

 

Last year, Southeast Asia’s second-largest economy expanded by 1.9%, which was below the 2.5% growth recorded in 2022 and behind other regional economies. The country is grappling with high household debt, increased borrowing costs, and the impact of China’s economic slowdown.

 

Last week, the finance ministry lowered its 2024 growth forecast to 2.4% from 2.8%, although it noted that growth could reach 3.3% if the government’s 500 billion baht ($13.5 billion) household stimulus plan is implemented in the fourth quarter as planned.

 

The tourism sector, another vital growth driver, is expected to attract 35 million foreign visitors this year, consistent with the previous forecast, the business group stated.

 

“Tourism is a factor that is clearly recovering,” Kriengkrai Theinnukul, chair of the Federation of Thai Industries, said during a media briefing.

 

The government aims to achieve a record 40 million foreign visitors this year. From January 1 to May 5, Thailand welcomed approximately 12.6 million foreign visitors, a 39% increase year-on-year, with about 2.5 million Chinese tourists, according to government data.

 

The business group expressed concerns that a proposed minimum wage hike could negatively impact the economy and investment. They plan to send a letter to the labor ministry requesting reconsideration of this move.

 

Prime Minister Srettha Thavisin has defended his proposal for a nationwide daily minimum wage of 400 baht ($10.8), arguing that it is essential for boosting growth, despite concerns from business groups about the potential rise in wage costs.

 

 

Source: Reuters

 

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