The next five years promise a period of both challenge and opportunity for Thailand's economy. The forecasts suggest a mixed picture, with projected growth boosted by government stimulus and tourism on the one hand, but hampered by structural weaknesses and external economic pressures on the other.
The Thai economy faces significant challenges and uncertainties as we look to the coming years. Thailand's economic growth is influenced by several factors, including domestic and international dynamics. In 2023, analysts cut growth expectations to around 2,3% to 2,5%, largely due to a weaker third-quarter performance and delays in government spending. Political uncertainties and a controversial digital wallet policy also contributed to this cautious forecast (Bangkok Post).
The World Bank also lowered its growth projections for Thailand to 3,4% for 2023 and 3,5% for 2024, largely due to reduced global demand affecting Thai exports. Moreover, slow formation of a new government causes delays in both public and private investments (Bangkok Post). Nevertheless, the Bank of Thailand has kept its forecast for 2024 at a more optimistic 4,4%, partly thanks to government stimulus that should boost the economy. (Bangkok Post). This shows a clear contrast in economic prospects depending on domestic policy measures and external economic conditions. Inflation, which peaked in 2022, is expected to slow to 2-3% in 2023 thanks to falling energy prices and government measures to reduce living costs. (Bangkok Post).
For the long term, Thailand faces possible low growth over the next 20 years if major economic reforms are not implemented, mainly due to an aging population and declining private investment. (Bangkok Post).
Economic growth prospects
The Bank of Thailand and the International Monetary Fund (IMF) have both adjusted their growth forecasts for Thailand. The Bank of Thailand forecasts growth of 4,4% in 2024, helped by government stimulus and a revival in tourism. (Bangkok Post). This is in line with the IMF's revised forecast, which now expects growth of 3,6% in 2024, compared to a previous estimate of 3,2%. (Bangkok Post). The World Bank, on the other hand, has lowered its growth expectations to 3,2% for 2024, mainly due to a slowdown in exports and fiscal consolidation. (Bangkok Post).
Structural reforms and long-term challenges
A crucial aspect for Thailand is the need for structural reforms. Thailand's economy faces deep-seated problems such as an aging population, income inequality, and a lack of investment in high-end technologies. (Bangkok Post). These structural weaknesses hinder long-term growth potential and make the economy vulnerable to external shocks.
Investments and infrastructure
The Thai government has announced plans to develop economic corridors in the south and northeast, which are expected to attract investment and reduce economic inequality. (Bangkok Post). These initiatives are crucial to strengthen the domestic economic base and reduce dependence on tourism and exports.
Risks and uncertainties
Despite this positive outlook, there are significant risks and uncertainties. The geopolitical tensions, especially in relation to trade relations with China and the US, could have a negative impact on Thai exports. (Bangkok Post). Moreover, political stability in Thailand remains a concern, which could deter investors.
Conclusion
Thailand is at a crossroads. The next five years will determine the economic direction the country takes. With targeted investments in infrastructure, technology and education, together with necessary structural reforms, Thailand can achieve stable and sustainable growth. However, ignoring these crucial areas could lead to a period of economic stagnation or even recession, as some analysts fear (Bangkok Post) (Bangkok Post). Balancing short-term stimulus measures with long-term structural reforms will be crucial for Thailand's future economic health.
About this blogger
- The Expat (66) has been living in Pattaya for 17 years and enjoys every day in the land of milk and honey! Previously employed in road and hydraulic engineering, but fled the capricious weather in the Netherlands. Lives here with his Thai girlfriend and two dogs just outside Pattaya, a 3-minute walk from the beach. Hobbies: enjoying life, going out, sports and philosophizing with friends about football, Formula 1 and politics.
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Thailand has once again missed a turn and is experiencing a particularly poor recovery of the economy in post-corona times compared to other countries.
The causes have been known for decades, but there are probably still interests to defend that prevent necessary changes. This is Thailand is a frequently used term for good reason. What seems simple has become impossible and vice versa.
We look at it and see the quality group tours from India, China and Russia visiting the country, and the biggest question is whether anything will stick to the Thai bow. People quickly think that mass is a cash register and that shows short-sightedness.
If it is true, there will soon be changes in the cabinet and we will have to muddle through. What a charade, but democracy has spoken….
Johnny BG, 'defend interests that prevent necessary changes' and you blame that on 'democracy'? I do not understand that. It is precisely the top of the country that is holding back changes for fear that the flow of money will be distributed more fairly. By the way, this 'top' can also be found in neighboring countries and Vietnam, where the burden is immense and passes over the hard-working citizen.
In every country, political stability attracts investors. That stability has been lacking in Thailand for decades. Let's hope that the uniforms stay in the barracks for ten years, that will make a big difference.
I am of course talking about the current fake democracy and the undemocratic way in which things are currently arranged in the country, such as the Thaksin soap and his fake baby practices.
The clincher and the eternal fear-mongering that stability attracts investors is simply not true in the case of TH. Japan, Singapore, US, HK, China are the largest investors and NL is the largest EU investor. Not countries that mean nothing in the world.
And one coup more or less does not even cause real disapproval from those countries and everything continues as usual, because there are other things to do than domestic whining.
I call it express whining because it really doesn't matter whether a soldier or an elected official is in power. Both groups are not addressing the real issues and that is education and very old fashioned work ethics. I already see people around me at the age of 25 who cannot do anything and want to retire at the age of 40. Do you find it strange that money earners would rather not share if work-shy people are the future? Raking in as much as you can is also the credo among the middle class, because you can only have it and the rest is simply not really important anymore.
It is all painful for people from a Calvanist environment, but as has often been said, I think the country's wisdom approach shows more respect than the colonial finger. Thais find the latter completely irritating.
Quote: “Structural reforms and long-term challenges
A crucial aspect for Thailand is the need for structural reforms. Thailand's economy faces deep-seated problems such as an aging population, income inequality, and a lack of investment in high-end technologies (Bangkok Post). These structural weaknesses hinder long-term growth potential and make the economy vulnerable to external shocks.”
I think that tackling the major differences in incomes and ownership should be a priority. The average household income is 45.000 baht in Bangkok and 20.000 baht in Isaan. Wealth inequality is even greater, one of the largest in the world. It is these differences that hold back further development.
Average hits like a pair of pliers to a pig, dear Tino.
Median would be more accurate to get an impression of what people actually earn.
This does not alter the fact that inequality can be reduced by salary increases for working men/women.
Geographically, Thailand has had a strong advantage for a long time, the step from the tea towel to the tablecloth, as my employer used to say, is difficult in Thailand.
Without Thailand's location, many would have looked the other way long ago.
The surrounding countries of Southeast Asia will also have to be pulled up in the current and that is difficult.
I see little difference in mentality among many Thais when it comes to the 'top' and the 'ordinary' man/woman.
Money is there to be spent, preferably as much and more as is available.
Democracy, of course they can talk about anything as long as they have the last word.
For foreign investors, political stability would not only be important, but also make it legally clearer what belongs to whom and why.
The obsession with getting 80 million tourists here is short-term politics and reminds me of southern European politics in the earlier years.
The trees simply don't grow to the sky.
Nice story, thanks 'expat', but some water will still flow through the Thai rivers before this becomes a reality.
Quote: “Average hits like a pair of pliers to a pig, dear Tino.
Median would be more accurate to get an impression of what people earn.”
Tell me, william-Korat, what is the median income in Thailand and for the various regions? And how different is that from the average income? Median household income in Thailand is 22.000 baht but I can't find data for the regions. You do?
(Median income: 50 percent have a higher and 50 percent have a lower income. That provides a better insight, but also quite useful for comparisons between regions in an average income.)
Even the minimum wage is different as you know Tino.
So ………………..
https://wageindicator.org/salary/minimum-wage/thailand
Um, to answer your question, NO
I did come across a piece where tax brackets and undeclared work [not paying tax on your income] are noted as being quite popular in Thailand.
Updated: March 18, 2023
You shouldn't flaunt this to earn a lot.
https://nl.indeed.com/carrieregids/salaris/gemiddeld-loon-thailand
In the Netherlands, the differences in income between provinces are not that great:
Average income per person in euros
Richest province North Holland: 32.000
Poorest province Friesland 25.000
Cities
Richest Bloemendaal 49.000 (major exception)
Amsterdam 36.000
Den Helder 28.000
I always thought you didn't like comparing things with the Netherlands, but I'm forgiven hhh
Bangkok residents often rent and the simple costs of living are simply higher. Example: vegetables come from Isaan and go to Talad Thai in Rangsit and then to Talad Klong Toei. Everyone adds 30-60% on top ex. transport costs of 10 baht per kg.
At the source also during Covid a safe haven because of paid off property food costs 30 baht / kg and in BKK a multiple. With 20.000 you can therefore do much more as a family in Isaan than in BKK and therefore 45 k for 3 people is about the same.
It is a different approach to what is fair and apparently the choice has been made that land ownership, even though the money is in the property and not in cash, also has serious value. With nothing you eat the value and with work you preserve it. It seems like NL with that AWBZ contribution.
Which country is not at a crossroads at any given moment? Which country is not engaged in economic growth and therefore recognizes challenges and opportunities? Not Thailand in any case. The author refers to an outdated article in the Bangkok Post of October 12, 2023, in which the Bank of Thailand (BOT) predicts growth of 4.4%. Strange, because at the same time numerous articles are subsequently cited that list a decline in that percentage and that growth.
Let's face it: since October 2023, Thailand's economy has not been doing well at all. Last week, April 11, Bangkok Post quoted Thai economists affiliated with a US think tank warning of an absolute decline in Thailand's national growth to just 3%. https://ap.lc/tUCVH
Thailand is not at a crossroads. It dares not. Thailand is merely continuing on a path of conservatism and nepotism that it embarked upon years ago. Despite the lessons of the previous period 2014-2023. To begin with, the results of the May 2023 elections were ignored, and to this day, manoeuvres are being used to thwart the democratic process.
Old boy raisin bread remains important. https://ap.lc/CtwYO
If Thailand wants to keep up with the economic momentum of nations, the country has only one thing to do, and that is to democratize all layers of the population. In May last year there was such an opportunity, but it was subsequently ruined. Thailand does not have a good global reputation. Until the beginning of the last century, the country experienced recurring military coups, coupled with the removal of elected leadership, high private debt mountains, a low level of education, persistent scandals surrounding corruption, and a one-sided focus on tourism. Much-needed foreign interest and investments are therefore lacking, as are infrastructure works, as well as a socio-economic but especially mental revival of its population. In the meantime, the current PM admits that not much has been achieved in the past 7 months. https://ap.lc/wFyus
I would like to say two things about this, following the example of Joop den Uijl:
1. We should take a closer look at where these incomes (average or modal) come from. A minority of Thais have regular work with an employment contract, insurance and a monthly salary. So stability, although you can lose your job the same day and there are no benefits. The majority are 'self-employed', 'self-employed' or receive their income from elsewhere. Elsewhere, this mainly concerns children or family members who work abroad. For the rich, mom and dad provide all the needs of their children and grandchildren. Why would you work?
2. We need to stop thinking in terms of economic growth. The revenues from this economic growth go disproportionately to the rich, the shareholders, the owners of movable and immovable property, the speculators and the workers receive a grab-bag. Thailand would be much better off if Thais moderated their consumption (resulting in negative growth) and made and exchanged more goods and services themselves, possibly backed by a local currency. Distance yourself from the existing economic system (especially now that Thailand is so weak) and focus on happiness.