Thailand's economic outlook is currently characterized by both optimism and caution as it faces a complex interplay of global challenges. The SCB Economic Intelligence Center (EIC) projects that Thailand's economy will grow by 4% in the fourth quarter of 2024, driven by a recovery in private investment and tourism. However, this growth comes amid a downgraded global economic growth forecast for 2025, which has been reduced from 2.8% to 2.5% due to the potential reimplementation of tariffs under Donald Trump's policies, referred to as 'Trump 2.0' [2508f0f0].
The International Monetary Fund (IMF) has also revised its GDP forecast for Thailand, lowering it from 4.4% to 2.7% for 2024, largely due to rising oil prices and shipping disruptions that threaten inflation and interest rates in the country. As of early October 2024, Brent crude oil prices surged by 4.8% to US$77.4 per barrel, raising concerns for Thailand, a major oil importer [893a65cb].
Despite the challenges posed by potential tariffs on over 70% of Thai exports to the U.S., the Tisco Economic Strategy Unit (ESU) remains cautiously optimistic, forecasting a GDP growth of 3% in 2025, supported by public and private investments and a resurgence in tourism [810b6bd2]. However, consumer confidence remains low, with 60% of respondents expecting an economic decline, and there are concerns about the deterioration of retail loan quality [2508f0f0].
The Bank of Thailand is expected to cut the policy interest rate by 0.25% to 2% in February 2025 to stimulate economic activity. The Thai baht is projected to weaken slightly in early 2025 but is anticipated to strengthen later in the year [2508f0f0]. The Oil Fuel Fund's deficit has decreased to less than 97 billion baht, providing some relief, but the Federation of Thai Industries warns of negative trade impacts, particularly on exports to the Middle East due to rising shipping costs [893a65cb].
The Thai Stock Exchange (SET) has experienced fluctuations, closing at 1,427.54 points at the end of November 2024, down 2.6% from October. Despite these fluctuations, 75% of firms surveyed by SET view Southeast Asia as a growth opportunity [cdde3ab2]. Policymakers are urged to address economic disparities highlighted between different household and business sectors to ensure a more balanced recovery [2508f0f0].