Ministry predicts 2.7% growth this year

The Finance Ministry’s Fiscal Policy Office (FPO) forecasts Thai GDP growth of 2.7% this year and 3% in 2025.
Fiscal policies have been fully utilised to stimulate the economy and additional support from monetary policy is needed to lift growth, said the FPO.
Speaking during the ministry’s economic projection briefing for 2024 and 2025 on Thursday, Pornchai Thiraveja, director-general of the FPO, said the office maintains its 2024 growth forecast at 2.7%, within a range of 2.2-3.2%, unchanged from July’s estimate.
This rate reflects a recovery from 1.9% growth last year, he said.
The uptick is attributed to tourism and exports, with foreign arrivals expected to reach 36 million this year, up 27.9% year-on-year, generating 1.69 trillion baht in revenue, a gain of 37.4%.
Average spending per tourist is estimated at 47,000 baht. As of October, foreign arrivals tallied 28.4 million, generating 1.3 trillion baht in revenue.
According to Mr Pornchai, the growth is also supported by private consumption, which is projected to expand by 4.6% because of the government’s 10,000-baht cash handout, an export uptick of 2.9%, and government consumption and investment gaining by 2.1% and 0.8%, respectively.
Private investment this year is expected to contract by 1.9%, compared with 3.2% growth last year, attributed to declining sales of internal combustion engine vehicles.
Given the economic stability, the FPO projects a headline inflation rate of 0.4%, outside of the Bank of Thailand’s inflation framework of 1-3%, attributed to lower crude oil prices.
Deflation is unlikely as the economy is still growing, according to the office.
The current account surplus is expected to reach US$10.3 billion, or 1.9% of GDP, higher than the $7.4 billion surplus in 2023.
The trade surplus is projected to be $13.5 billion, down from $19.4 billion last year.
The FPO projects 3% growth next year, within a range of 2.5-3.5%, which would be the highest growth rate since the pandemic years of 2020-21. This 3% forecast aligns with the International Monetary Fund’s outlook for Thailand.
According to Mr Pornchai, positive factors supporting the 2025 outlook include expected private consumption growth of 2.9%; exports benefiting from global demand and improved economic conditions in key trading partners, with projected expansion of 3.1%; and tourism, with foreign arrivals expected to reach 39 million, up 8.3%.
Private investment is expected to grow by 2.3% next year as a result of large-scale investments by the private sector approved by the Board of Investment, particularly in high-tech industries, noted the FPO.
Public investment is projected to grow by 4.7%, driven by accelerated budget disbursement and government-led projects, such as the Laem Chabang Port Phase 3, double-track railway projects, and the high-speed railway linking three airports.
In terms of economic stability in 2025, the FPO expects headline inflation to stay at 1%, with the current account surplus estimated at $10 billion and a trade surplus of $12.5 billion.
Key risks that warrant monitoring include geopolitical issues, the US presidential election, and concerns over household and corporate debt, noted the office.
According to Mr Pornchai, the Finance Ministry will begin normalising fiscal policy by gradually reducing the budget deficit in line with the government’s medium-term fiscal plan, targeting a budget deficit close to 3% of GDP.
For fiscal 2025, the government projects a budget deficit of 4.5% of GDP, which is expected to fall to 3.5% in 2026. However, this depends on the GDP growth figures reported by the National Economic and Social Development Council, he said.
Mr Pornchai said fiscal policies have been fully leveraged in recent periods, resulting in an expected government debt level of 65-66% of GDP next year, below the fiscal sustainability threshold of 70%.
He said monetary policy must play a supportive role in supplementing economic stimulation if growth targets above 3% are to be achieved.
Mr Pornchai cited Section 28/7 of the Bank of Thailand Act, which mandates that inflation targets set by the Monetary Policy Committee must align with state policies.
Under Section 7, monetary policy must be managed to ensure the stability of financial institutions, while also taking government policy into account.