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UTTC cuts Thailand’s growth forecast this year to 2.6%

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Thailand’s economic growth forecast for 2024 is 2.6%. This is a reduction from 3.2%, as earlier projected, due to the fragile economic recovery, a slowdown in private investment, the weak purchasing power of the consumers and delayed disbursement of the 2024 budget, reported the Centre of Economic and Business Forecasting of the University of the Thai Chamber of Commerce (UTTC).

Thanavath Phonvichai, UTTC rector and head of the centre, said today that the Thai economy in the first quarter is projected to expand by only 2% and only two sectors, tourism and exports, have enjoyed continuous growth.

He said that the economic situation is expected to pick up in the second quarter to 2.5%, thanks to the disbursement of the national budget, the tourism sector and exports, adding that the recovery is fragile and is concentrated in certain export sectors, such as the export of rice, rubber and fruits.

Although some consumer confidence has returned, it is still low. Many consumers are still feeling the pinch of the impacts of the COVID pandemic and higher interest rates, said Thanawat.

Meanwhile, Vichien Kaewsombat, assistant director of the centre, said that economic recovery will become more evident in the third quarter, as growth is expected to be 3.1% because lending rates are expected to decline, in line with the anticipated Monetary Policy Committee’s decision to lower the policy rate.

Growth in the 4th quarter is forecast at 2.8%, due to the high level of household debt, which will result in an increase of non-performing loans, resulting in financial institutions being more cautious in extending loans.

He also said, however, that there is a possibility that growth for the whole year may increase to 3%, if the disbursement of the 2024 national budget can be accelerated and the “digital wallet” scheme is approved quickly.

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