Thai Business Group Downgrades 2024 GDP Growth Forecast amid Slow Exports and Wage Concerns

Thailand’s economy is projected to expand by 2.2% to 2.7% this year, a decrease from the previous estimate of 2.8% to 3.3% due to a slow recovery in exports, according to a prominent joint business group.

In the first quarter of 2024, Thailand’s exports declined by 0.2% year-on-year, as per data from the commerce ministry.

The Joint Standing Committee on Commerce, Industry, and Banking, comprising representatives from these sectors, anticipates that Thailand’s exports will only grow by 0.5% to 1.5% this year, compared to the earlier projection of 2% to 3%.

Thailand’s economy expanded by 1.9% last year, a decline from the 2.5% growth in 2022, falling behind its regional counterparts due to challenges such as high household debt and borrowing costs.

The finance ministry recently revised the country’s economic growth forecast for 2024 to 2.4%, down from the previous 2.8%, but indicated that growth could still reach 3.3% if the government successfully implements its 500 billion baht ($13.5 billion) household stimulus plan in the fourth quarter as scheduled.

Meanwhile, the tourism sector, another significant growth driver, is expected to welcome 35 million foreign visitors this year, maintaining the previous forecast. Kriengkrai Theinnukul, chair of the Federation of Thai Industries, highlighted that there are clear signs of recovery in the tourism sector.

Thailand has recorded approximately 12.6 million foreign visitors from January 1 to May 5, a 39% year-on-year increase, including around 2.5 million Chinese tourists, according to government data.

Moreover, the business group expressed concerns about a government proposal to raise the minimum wage, stating that it could negatively impact the economy and investment. They intend to reach out to the labor ministry to request a reassessment of this initiative.

On the other hand, Prime Minister Srettha Thavisin defended the government’s plan to introduce a nationwide daily minimum wage of 400 baht ($10.8), asserting that it is crucial for stimulating growth.