Thailand’s Economy Surpasses Expectations with 1.5% Growth in 1Q24

Thailand’s official data released on Monday revealed that the economy expanded by 1.5% in the first quarter compared to the same period last year, surpassing analysts’ predictions.

According to data from the National Economic and Social Development Council, Southeast Asia’s second-largest economy saw a quarterly adjusted growth of 1.1% from January to March.

This quarterly growth not only exceeded expectations but also prevented the economy from falling into a technical recession, following a 0.4% contraction in the final quarter of 2023. Economists participating in a Reuters poll had anticipated a 0.8% year-on-year GDP expansion and a 0.6% growth from the previous quarter for the March quarter.

During the fourth quarter of 2023, Thailand’s GDP witnessed an annual growth of 1.7%.

The state planning agency, NESDC, has revised its forecast for Thailand’s 2024 GDP growth to a range of 2.0% to 3.0%, slightly below its previous projection of 2.2% to 3.2%. This comes after the country experienced a 1.9% growth rate last year. The agency also anticipates a more modest increase of 2.0% in exports for 2024, compared to the earlier projection of 2.9%.

In terms of inflation, the NESDC expects headline inflation to fall between 0.1% to 1.1%, which is below both their previous forecast and the target range of 1% to 3% set by the Bank of Thailand. Additionally, the agency predicts a lower number of foreign tourist arrivals at 36.5 million this year, compared to the previous estimate of 35 million.

Thailand has seen positive growth in foreign tourist arrivals in the first few months of 2024, with a 39% year-on-year increase totalling 13.16 million visitors from January 1 to May 12. Chinese tourists accounted for approximately 2.6 million of these arrivals. Notably, in 2019, Thailand welcomed a record high of nearly 40 million foreign tourists before the pandemic.

Last month, the finance ministry downgraded its 2024 growth forecast from 2.8% to 2.4%, but remains optimistic that the implementation of the government’s flagship 500 billion baht ($13.8 billion) household stimulus scheme in the fourth quarter could potentially boost growth to 3.3%.