According to our analysis, consumer spending in Thailand is expected to grow by 4.8% in 2024. This positive outlook is based on the recovery of the wider Thai economy and a more stable medium-term trajectory for growth. The favorable macroeconomic environment and the recovery from the impact of Covid-19 are expected to support this growth.
Consumer confidence in Thailand has reached a 45-month high, indicating a likelihood of increased spending on big-ticket items as the economic and health situation stabilizes. However, one key risk to the consumer spending outlook for 2024 is the high debt levels of households in an elevated interest rate environment. This may constrain their ability to spend on other goods and services as more of their budgets are allocated to debt repayments.
High-frequency data suggests that consumer confidence will continue to rise, further bolstering spending on big-ticket items. While overall economic momentum will support household spending in the coming quarters, the high debt levels of households amidst an elevated interest rate environment remain a significant risk to the outlook for 2024.
Despite these risks, we maintain a positive outlook for consumer spending in Thailand throughout 2024. Sectors such as retail, hospitality, tourism, and gastronomy are expected to contribute to growth. Real household spending, calculated at 2010 prices, is projected to grow by 4.8%. This deceleration from the estimated 6.1% growth in 2023 reflects the stabilization of consumer spending following the volatility induced by Covid-19 lockdowns.
In total, we anticipate consumer spending to exceed THB8.9 trillion (in 2010 terms), supported by a favorable macroeconomic environment. The Bank of Thailand’s prospective policy to ease rate hikes in the first half of 2024, in response to controlled inflationary pressures and a robust Thai baht outlook, is expected to further support spending levels throughout the year. It is worth noting that total spending in 2024 is expected to surpass pre-pandemic levels for the first time since the outbreak, highlighting the market’s medium-term recovery outlook.
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