Thailand is on high alert, with Thailand's National Economic and Social Development Council (NESDC) keeping a close eye on the ripple effects of China's economic slowdown.
Despite preliminary forecasts, China's sluggish growth last year cast a shadow over Thailand's economic outlook for the coming year.
Danucha Pichayanan, head of NESDC, predicts that Thailand's economic expansion will hover between 2.7% and 3.7% in 2024, with a median forecast of 3.2%. What is the fuel for this growth engine? This is a combination of increased government spending, continued private sector investment, and unwavering domestic consumption trends since 2023.
Thailand's economic rebound after the pandemic, with public spending and domestic tourism recovering, is particularly beneficial to the service sector. However, external forces threaten the sunny economic outlook. Global fragility, economic volatility and geopolitical quagmire are wreaking havoc.
On the world stage, NESDC expects the global economy to grow by 2.7% in 2024, down slightly from 2.8% last year, and global trade volumes are expected to make a comeback, reaching 3.2% from 2.1% last year. Despite initial expectations, China appears to be faltering and is grappling with a property debt problem and a decline in domestic consumption, putting the entire global economy at risk. The Thai government's strategy to deal with these storms is crucial.
NESDC expects China's economy to grow by 4.3% in 2024, slowing from 4.9% in the previous year, and stressed the need for Thailand to remain flexible and adapt to China's economic hurdles. As NESDC tackles these global economic conunciations, it emphasizes that continuous monitoring is essential to grasp the potential impact on the Thai economy.
While China is in trouble, Thailand sees a glimmer of hope in maintaining high export potential, despite a 1% drop in exports to China in the first 11 months of last year. According to The País, growing geopolitical concerns, especially in Israel, could affect oil prices.
NESDC forecasts a 3.8% increase in Thai exports this year compared to the previous year, highlighting the urgency of maintaining export momentum.
In order to accelerate the development of tourism, NESDC advocates stimulating spending by foreign tourists, an area that has not yet reached its full potential. With the global economy at a potential crossroads, Thailand's survival strategy includes expanding trade markets, attracting tourists, and speeding up trade negotiations and free trade agreements (FTAs) with key partners.
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