BANGKOK: Thailand’s economy is expected to grow 2.4% this year, down from the 2.8% expansion projected in April, largely due to weaker-than-expected exports and public investment early in the year, the World Bank said on Wednesday.
Growth in Southeast Asia’s second-largest economy will be driven by consumer spending, measured recovery in the tourism industry, and a rebound in exports, the World Bank said in a statement.
Last year’s growth of 1.9% lagged regional peers.
Foreign tourist arrivals are expected to surge to 36.1 million this year, well above the 28.2 million arrivals in 2023 and nearing their pre-pandemic peak, the financial institution said.
Total arrivals are projected to reach 41.1 million in 2025, surpassing the pre-pandemic levels, as Chinese visitors return in larger numbers, it said.
Economic growth is projected at 2.8% in 2025, supported by stronger demand at home and overseas, as well as increased government spending, the World Bank said.
The 2025 growth outlook was reduced from the 3% forecast in April.
The Bank of Thailand had forecast economic growth of 2.6% this year and 3% for next year.
“Given the uncertainties, the central bank should hold interest rates and wait for more clarity before implementing a policy,” World Bank economist Kiatipong Ariyapruchya said at an event in Bangkok.
Thailand’s central bank held its key interest rate steady at 2.5% last month.
The next rate review is on Aug. 21.
‘Digital Economy Enhancement Project’ WB rates overall implementation progress as ‘satisfactory’
The government plans to launch a 500-billion-baht ($13.6 billion) handout scheme, the ruling Pheu Thai Party’s key platform in the 2023 elections, in the fourth quarter to support the economy.
The scheme, which some experts have called fiscally irresponsible due to concerns over how it would be funded and over the impact on public debt, has already been delayed twice this year.
The government is planning to launch additional measures this year that could spur growth up to 3% this year, Deputy Finance Minister Paopoom Rojanasakul told reporters.