Recently, the World Bank Group released the updated economic monitor of Thailand, evaluating on Q3 results, along with future perspective on the economy.
In Q3 the export growth of Thailand slowed down which is seen generally in the ASEAN region, which is consistent with expected developments as a consequence of global turbulence. The economy was however boosted in growth with 4.5%, which can be accredited to the boost in tourism revenue, that has reached 45% of pre-pandemic levels. Growth in the overall economy is downsized in expectations from the World Bank, and the 3.6% projected growth is heavily reliant on tourism and foreign investments. The long-term growth of the market is also downsized to 3.0% which is 0.6% lower than what has previously been observed in the market before COVID.
Inflation levels are sitting at 6.0%, which displays difficulties in reaching the target 1-3% as Thailand currently holds the second highest inflation rate in the ASEAN region. The GDP levels remain influenced by high cost-of-living related to energy, which has seen a reduction of 23.4% of GDP in public spending in fiscal year 2022. This along with a 60.7% public debt of GDP, which is 20 percent-points more than pre-pandemic levels, signifies pressure on the public and monetary policy.
Corporate debt levels is sitting at 90% of GDP levels, and with COVID related loan incentives set to be out phased, this can increase pressure on especially SME’s. The pressure in an overall sense may contribute to slower poverty reduction development, as income distribution will likely focus on economic recovery related to growth in tourism and investment attraction.