Thailand lowers 2024 GDP growth estimate to 2.5 per cent

Revision a reflection of slowdown in industrial sector

 

Thailand's Fiscal Policy Office (FPO) has lowered its economic growth estimate for 2024 to 2.5 per cent, down from the previous estimate of 2.7%.

 

The revision reflects a slowdown in the industrial sector, particularly automobile production, which is impacting overall GDP growth.

 

FPO director-general Pornchai Thiraveja, who is also spokesperson for the Finance Ministry, announced on Thursday the revised estimate, citing a projected growth range of 2.3% to 2.8%.  

 

The adjustment follows significant discrepancies in fourth-quarter industrial production data, particularly within key industries like automotive, which have been hampered by both domestic and international economic headwinds.

 



 

The industrial sector's substantial 26% contribution to Thailand's GDP, with the automotive industry representing 11% of the industrial production index, makes it a crucial economic driver.  

 

The ongoing slowdown, including a 21% year-on-year decline in automotive production in November, has accelerated the shift towards electric vehicle technology alongside traditional combustion engines.
  

Pornchai noted that the anticipated 2.5% growth in 2024 follows a 1.9% expansion in 2023, which was supported by a robust tourism recovery, with 35.5 million international visitors; a projected 4.7% increase in private consumption (with a range of 4.5% to 5%); and an expected 5.9% growth in export value in US dollars (within a range of 5.7% to 6.2%). 

Government consumption is estimated to have grown by 0.6% (between 0.4% and 0.9%), while public investment was expected to rise by 2.1% (between 1.9% and 2.4%).

 

However, private investment is estimated to have contracted by 2.7% (within a range of minus 3% and minus 2.5%) due to a decline in machinery investment, falling sales of combustion engine vehicles, and difficulties in accessing credit. These factors are prompting real estate operators to postpone investment plans.

(2025/01/30-00:00)