Thailand’s Economy Surges in 2024, But Uncertainties Remain: Monetary Policy and Government Spending Forecasts

The Bank of Thailand’s April 10 monetary policy meeting revealed that Thailand’s economy is expected to grow at a faster rate in 2024 compared to 2023, supported by private consumption and tourism. Despite this positive outlook, uncertainties remain regarding factors such as export recovery, government budget disbursement, and fiscal stimulus measures.

During the meeting, the monetary policy committee voted 5-2 to keep the one-day repurchase rate steady at 2.50%, the highest in over a decade, for the third consecutive meeting. Two members of the committee advocated for a quarter-point cut. The next rate review is scheduled for June 12.

The committee members believe that the current policy rate is appropriate for sustaining growth and fostering macro-financial stability in the long term. However, they acknowledge that uncertainties persist in the Thai economy, highlighting the importance of factors like export recovery and government spending.

The Bank of Thailand adjusted its 2024 economic growth forecast to 2.6% from the previous projection of 2.5%-3.0%. In contrast, the government anticipates a 4% growth rate for this year. Prime Minister and Finance Minister Srettha Thavisin has expressed disagreement with the central bank’s monetary policy, advocating for rate cuts to alleviate high household debt and the impact of China’s economic slowdown.

Thailand’s economy unexpectedly contracted by 0.6% in the final quarter of 2023, with full-year growth reaching 1.9%, below the 2.5% growth recorded in 2022. The government’s approval of the digital wallet stimulus scheme is expected to be implemented in