Krungsri Research Lowers 2023 Thai GDP Forecast to 3.3% from 3.6%

Krungsri Research has lowered its forecast for Thai economic growth in 2023 from 3.6% to 3.3% due to weaker-than-anticipated public consumption and investment this year, as well as lower government expenditure as a result of the unwinding of Covid-19 stimulus measures and postponed spending on infrastructure projects.

Krungsri Research analysts stated that a lower-than-expected 4Q22 growth of 1.4% YoY compared to an estimate of 3.7% was the main reason for lowering growth projections. However, the recovery has maintained speed into the beginning of 2023.

With the unwinding of Covid-19 stimulus measures and delayed spending on infrastructure projects by the government, the Thai economy is likely to see weaker-than-expected public consumption and public investment in 2023, the research center said in the note published on Tuesday.

This will have a multiplicatively detrimental effect on private spending and investment.

Export growth is expected to remain steady at 0.5%. Overall, Krungsri Research believes Thailand will avoid a recession this year, and that with economic growth exceeding last year’s 2.6%, Thailand’s economic activity will surpass pre-Covid levels by the end of 2023.