Looking at the Thai economy in 2024, it will definitely grow..but not all the way?!?! Parade of GDP downgrading points to sluggish budget – light exports/private sector hopes for lower interest rates

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The Year of the Golden Dragon 2024 opened beautifully. But as time passed, it began to be seen that the Thai economy was still not as satisfactory as hoped. Although many institutions have clear numerical indicators, But there are still various risk factors or effects. There’s a lot of pressure coming in. And after the first quarter of this year has passed, it can be concluded that domestic demand is still weak. The Thai economy needs additional stimulus. from both fiscal policy in accelerating budget disbursement Financial measures and other stimulating measures

In the past, the government has always tried to confirm that “The Thai economy is now entering a period of crisis,” reflecting many pressing factors. and try to lift the weight of issues that put pressure on economic growth that are partly the result of “Interest rates are at a high level” previously Settha Thavisin, Prime Minister and Minister of Finance He had said after the Office of the National Economic and Social Development Council (NESDB) or NESDB reported the Thai economy in the 4th quarter of 2023 that it expanded only 1.7%, accelerating from the previous quarter.

As for the whole year 2023, the Thai economy grew only 1.9%, saying that over the past 10 years, our average GDP grew less than 2%, lower than neighboring countries. Compared with the ranking of world GDP, Thailand is steadily decreasing. And don’t forget that since this government came in, we haven’t been able to use the budget at all. Although every ministry uses policy as a driver to stimulate the economy to make people’s lives better. But today I have to admit that “There is no new money coming into the system at all.”

“Many agencies are continuously lowering their GDP estimates every month. The government has tried to implement every available measure. And personally, I would like to leave you with this message that interest policy does not require a budget. Currently the policy interest rate is 2.5% per year. If it is reduced to 2.25% per year, just one dime. It will help relieve the burden of all citizens. But he doesn’t discount.”

However, from the information of The Ministry of Finance has graded GDP growth in 2023 as not exaggerating at 1.8%, which is a reduction from the previous forecast of 2.7%, while this year 2024 it is expected that the Thai economy will expand. at 2.8%, which was a decrease from the original forecast of 3.2%, which clearly confirmed that The economic figures that the Ministry of Finance has considered have been careful, thorough, and well thought out.

The economic part from the point of view “The Bank of Thailand (BoT)” at the Monetary Policy Committee (MPC) meeting on April 10, 2024, resolved to maintain the policy interest rate at 2.50% per year and assessed that The Thai economy is likely to expand at a high rate. It is expected that in 2024 the Thai economy will expand at 2.6% per year and in 2025 it is expected that the economy will expand to 3% per year.

The Thai economy this year is likely to expand at a higher rate than last year. with continued support from private consumption and tourism. There is also momentum from government spending that will return to increase during the rest of this year.

Meanwhile, the “World Bank (World Bank)” has come out to reduce the Thai GDP forecast in 2024 down to 2.8% from the original forecast of 3.2% due to exports and government investment that are likely to slow down. This is a result of the delay in the 2024 budget. The forecast does not include the results of the Digital Wallet project, but if the project is implemented, it will increase Thailand’s GDP by another 1% at the same time. This will cause public debt to increase from the current level by approximately 2%.

Medium-term forecast Thailand will face challenges in solving the problems of increased spending related to the elderly, global warming, and the need to formulate policies to prevent future crises.

From the perspective of the private sector I have to admit that almost a hundred and a hundred people expected to see the picture. “Reducing the policy interest rate” or “reducing the fees for sending contributions to the Financial Institutions Development Fund (FIDF)” as has been done in the past. Because it is seen that it will quickly reduce the financial burden on households and businesses. This demand was reflected in the meeting of the joint committee of 3 private sector institutions (CPC) comprising the Thai Chamber of Commerce. The Federation of Thai Industries (F.T.I.) and the Thai Bankers Association, most recently Kriengkrai Thiennukul, Chairman of F.T.I. As the chairman of the meeting, he revealed that the meeting assessed the Thai economy in 2024. It is likely to grow within the estimated range of 2.8-3.3%, exports are expected to be at 2-3%, and inflation is at 0.7-1.2% under the economic situation. The risk of growth is lower.

At the same time, it is seen that the Thai economy needs additional stimulus from accelerating budget disbursement and lowering interest rates. This will quickly reduce the financial burden on households and businesses. Because interest costs are very important for every entrepreneur. Especially small SMEs It is considered that an interest rate reduction of only 0.25% or 0.50% is meaningful for SMEs. Because it will help them survive.

As for the issue of the price of diesel, which has increased after the measures to keep the price above 30 baht per liter ended, It will affect the transportation costs of the private sector. Both industrial and service sectors which is a high proportion of approximately 15% of the total cost But it is understood that the fuel fund is currently in the negative of more than 100 billion baht. It may not be possible to hold down the price of diesel any longer than this. Therefore, I would like to call on the government to find other measures. such as the establishment of a joint public-private committee on energy. to dismantle the energy structure It will be a more sustainable solution.

From the concerns and problems that have arisen, these are reflected in the industrial sector. By measuring the Industrial Production Index (MPI) in February 2024, it was at a level of 99.27, contracting 2.84% compared to the same period last year. This is mainly due to the decrease in automobile production. It is a contraction from within the country. The domestic economy is still recovering slowly due to the problem of high levels of household debt. causing consumers to remain cautious in spending and rising interest rates on loans, resulting in increased financial costs and debt burden of entrepreneurs.

Worawan Chittarun, Director of the Office of Industrial Economics (OIE). Said that the Industrial Production Index continued to shrink for the 17th month due to the main industry that continued to shrink and had a lot of weight in calculating the Industrial Production Index, namely the automotive industry. Overall, production in February 2024 decreased by 19.28% compared to the same period last year. decreased for the 7th month, while the industrial economic warning system The overall picture of Thailand in March 2024 sends a signal of caution in an improved direction from the previous month. This is because the overall picture of private investment is likely to recover during this period. for foreign factors Still need to watch out for the US market. and following the recession in the Japanese manufacturing sector.

while Montree Mahaprukphong, Vice President of the Federation of Thai Industries (F.T.I.) Revealing the results of the 39th FTI CEO Poll in March 2024 under the topic “Views on the current competitiveness of Thai industry” found that executives F.T.I. assesses the overall competitiveness of the Thai industry today, averaging all 9 aspects, including business agility. and legal compliance, production and operating costs, labor productivity. and manpower to support the needs of the industry

As well as readiness in developing technology, innovation and promoting R&D, promoting and attracting domestic investment including FDI, TDI and SME, trade, exports and competitiveness in international markets, adaptability of the sector. Industry towards sustainable development (SDGs) and Net Zero, infrastructure investment to support the industrial sector and the economic potential of the country lies in “Moderate level”

which amidst the fluctuations of the world economy which is fragile In addition, the Thai economy is still in the recovery phase. This makes the industrial sector need to adapt to deal with business operations. Under the factors that affect the competitiveness of the industrial sector

Of course, due to the pressures especially on the business sector, FTI executives have a proposal for the government to accelerate the upgrading of the entire industrial infrastructure system within one year, especially by taking care of improving the cost structure of production throughout the system so that the private sector can Competitive Laws and regulations are being reformed to promote flexibility in doing business or Ease of Doing Business, including the development of systems and measures to prevent corruption in agencies responsible for granting permission. This is considered a major problem that has held back Thailand’s competitiveness in the recent past.

Another perspective is from the private sector on the wholesale and retail side. It is acknowledged that sales in the latest period have dwindled somewhat, mainly as a result of most consumers still waiting for clarity from the government’s economic stimulus measures. Somchai Pornrattanacharoen, Honorary Advisor Thai Wholesale-Retail Association stated that it must be accepted that in the past the prices of products have increased a lot But the purchasing power of consumers has not come. due to poor income while things become more expensive Including the accumulation of debt burden since COVID-19. Now that I have money, I pay only from the front to the waist, but not to the back. It can be seen that during the emergence of COVID-19 There is also putting purchasing power into the lower levels of society through lending. But I didn’t look at the long term. Makes you fall into the debt trap that you yourself have created,” Somchai stated.

However, it is difficult to deny that the economy at this time seems to be growing but not at all. multiple engines Both the government budget Economic stimulus measures Private investment and consumption appear to be on track. But it’s still not at full strength. As for asking whether it has reached a “crisis” level or not, it is difficult to answer. It’s like the government and many parties still haven’t made it clear. The hope of the people from now on is to see relevant agencies come up with stimulus measures in every dimension. Because I have to admit that Cost of living What a burden of debt. It’s actually on the upswing. While that income is still a difficult matter to swallow. We can’t spit each other out anymore!!.

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