Deputy Finance Minister says stock market slump does not reflect overall economy
Release date: December 14, 2023 14:16
View of skyscrapers along the Chao Phraya River in Bangkok on Thursday. (Photo: Apichart Ginakul)
Thailand’s economic growth is expected to be 2.5% this year, accelerating to 3.2% in 2024, supported by tourism, exports and sustained consumer spending, the World Bank said on Thursday.
Growth forecasts for 2023 and 2024 have been revised downward from October’s forecasts of 3.4% and 3.5%, respectively. Southeast Asia’s second-largest economy grew by 2.6% in 2022.
The World Bank said export contraction and ongoing fiscal consolidation will slow growth in 2023.
Tourism and consumer spending will be the key growth drivers, while exports are expected to recover on strong global trade despite China’s economic slowdown, the central bank said in a report. Thailand Economic Monitor.
According to the World Bank, economic growth is expected to be 3.1% in 2025, while tourism is expected to suffer a setback due to China’s economic slowdown and return to pre-pandemic levels by mid-2025. .
The government’s planned digital wallet program could be worth 2.7% of gross domestic product (GDP) and, if implemented, could add an additional 0.5-1.0% to near-term growth in 2024 and 2025 The central bank said it could boost prices by as much as a percentage point.
As a result, the fiscal deficit could rise to 4-5% of gross domestic product (GDP), and public debt could reach 65-66% of GDP, up from around 60% currently. The report said.
The World Bank said that in Thailand, which is highly dependent on energy imports, escalating geopolitical conflicts and soaring oil prices could lead to a further spike in inflation, posing downside risks to the outlook.
In this regard, Deputy Finance Minister Krisada Chinavicharana said that despite the recent decline in the Stock Exchange of Thailand, Thailand’s economic stability remains strong.
He said the decline in the SET index did not reflect confidence in the economy or its stability.
The main stock index hit a three-year low on Wednesday, falling 18% since the start of the year as foreign investors sold 199 billion baht worth of Thai stocks.
“This could be a specific problem in the capital markets and we need to figure it out,” Crisada told reporters Thursday.
The SET index rose about 1.3% on Thursday, in line with regional markets, after the US Federal Reserve said its tightening cycle was likely over and warned of lower interest rates next year.