Publication: Thailand Monthly Economic Monitor, May 2024
Abstract
The economy slowed more than expected due to sluggish external demand and delayed budget approval. Expanding private consumption and tourism continued to drive services growth, albeit at a slower pace. Inflation increased due to the removal of energy subsidies and elevated food prices but remained the lowest among emerging markets. The delayed budget approval led to minimal public spending in Q1. However, the recent enactment of the FY24 budget and the upcoming rollout of the Digital Wallet cash transfer in Q4 buoyed the near-term growth outlook. Despite a current account surplus, the Thai baht depreciated in April due to a delay to the Fed’s easing cycle and concerns over the Thai economy and the fiscal implications of the Digital Wallet.
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“World Bank. 2024. Thailand Monthly Economic Monitor, May 2024. © World Bank. http://hdl.handle.net/10986/41552 License: CC BY-NC 3.0 IGO.”
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Publication Thailand Monthly Economic Monitor, August 2024(Washington, DC: World Bank, 2024-09-03)Growth accelerated in Q2 to 2.3 percent, slightly above expectations, but the recovery continued to lag ASEAN peers. In June, data indicated a subdued recovery, with activity slowing and consumer confidence declining amid heightened political uncertainty. While manufacturing growth expanded modestly for the full quarter, June activity data shows a renewed decline, and the growth in tourist arrivals slowed. The trade deficit persisted, driven by lagging export recovery and rising imports, particularly from China. Inflation edged up slightly to 0.8 percent (y/y) but remained among the lowest in emerging markets. Fiscal spending accelerated despite political uncertainty; the Bank of Thailand maintained its policy rate while easing credit card repayment regulations to support households. The Thai baht appreciated, driven by expectations of the Federal Reserve’s easing cycle and a persistent current account surplus.Publication Thailand Monthly Economic Monitor, September 2024(Washington, DC: World Bank, 2024-10-23)Economic activity improved, driven by external demand for exports and tourism. Manufacturing growth turned positive, supported by a surge in goods exports. However, internal drivers weighed on growth. Private consumption growth decelerated, impacted by stricter credit conditions. The acceleration of fiscal spending proved slower than expected, but a higher FY25 budget spending could support growth. The revised digital wallet is expected to boost gross domestic product (GDP) growth in the fourth quarter of 2024. The Thai baht appreciated driven by expectations of the Federal Reserve’s easing cycle and a persistent current account surplus. Inflation remained among the lowest in emerging markets, falling to 0.4 percent, due to lower energy prices; core inflation remained subdued due to weak domestic demand.Publication Thailand Monthly Economic Monitor, 17 January 2024(Washington, DC, 2024-01-22)The economy sustained its gradual recovery, buoyed by strong private consumption and improving goods exports but hampered by contracting manufacturing production. The economy is projected to grow 2.5 percent in 2023 and accelerate to 3.2 percent in 2024. Inflation remained negative for the third consecutive month and stayed well below peers, primarily due to falling energy and food prices as well as energy subsidies. The marginal increase in the minimum wage for 2024 is unlikely to exert significant pressure on inflation. The planned fiscal stimulus measures are expected to provide a short-term boost to growth but will delay fiscal consolidation. In December, the Thai baht appreciated against major trading partners, although net foreign portfolio outflows were the largest in three months.Publication Türkiye Economic Monitor, March 2024(Washington, DC: World Bank, 2024-06-03)Türkiye’s economic policies helped quickly recover from the COVID pandemic. The policies being implemented since late 2021 were built on loose monetary policy, prudent fiscal policy, boosting exports and employment, and managed to deliver strong GDP growth in 2022. These policies, -in addition to the rise in energy prices amid geopolitical tensions and the global monetary tightening cycle-, however also led to a very rapid increase in inflation, a widening of the current account deficit and the decline in the reserves which in turn affected investors’ risk perception adversely and increased macro financial pressures in the run up to the May 2023 elections. As a consequence, the growth momentum also slowed down starting from the second half of 2022. Following the elections, the new government started a process of normalization in macroeconomic policies in 2023H2 with an emphasis on tightening monetary policy to achieve disinflation. The monetary policy rate hikes, ongoing simplification in the macroprudential policy framework, and the correction in the exchange rate since May 2023 have helped to gradually rebuild confidence in the economy, and the tax hikes have helped reduce the fiscal deficit. The impact of the new policy framework has started to be reflected in the reduction in risk premia, realignment of interest rates, strengthening in foreign exchange reserves, and the improvements in the assessment of credit rating agencies.Publication Thailand Monthly Economic Monitor, February 2024(Washington, DC: World Bank, 2024-03-11)Thailand's economic recovery lagged further behind ASEAN peers as growth was a disappointing 1.7 percent in the fourth quarter and resulted in slower annual growth of 1.9 percent in 2023. Growth was hampered by weak external sector and delayed budget approval. In December, economic activity softened due to weak manufacturing, investment, and goods export. Inflation remained negative for the third consecutive month due to falling energy and food prices as well as energy subsidies. In this context, the Bank of Thailand held its policy rate. The fiscal deficit decreased due to the delayed budget approval. In January, the Thai baht remained stable against major trading partners, despite significant net foreign portfolio outflows.
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