According to a World Bank assessment, Thailand’s economy is predicted to expand by 3.9% in 2023 as a result of robust demand from China, Europe, and the United States as well as a rebound in tourism.
However, due to a decline in global demand, exports have decreased for eight months running.
Main Points
Due to robust demand from China, Europe, and the United States, as well as a resurgence in the tourism industry and rise in private consumption, Thailand’s economy is expected to pick up speed in the next years.
Weaker global growth, political unpredictability, an aging population, climate constraints, deteriorating export competitiveness, and excessive household debt are risks to Thailand’s economic growth.
Thailand must give climate change adaptation and water management a priority if it is to better manage the frequent floods and droughts it experiences, which pose serious risks to people’s lives, way of life, and economy.
Expectations are for the tourism industry to grow further.
With 29 million visitors predicted this year and 35.5 million in 2024, it is anticipated that the tourism industry will continue to grow.
The pace of growth is anticipated to slow in 2024 and 2025, with tourism and private consumption driving expansion. By 2023, 2% inflation is predicted to be the level.
With tourism as a major factor, the Bank of Thailand forecasts economic growth of 3.6% this year and 3.8% the following year.
structural difficulties continue
However, there are also hazards related to political unpredictability, global growth, and structural issues like aging populations and high household debt.
The report also emphasizes Thailand’s vulnerability to floods and droughts and the necessity for Thailand to address such risks. It recommends putting in place a strong framework for climate adaptation, investing in infrastructure for water resources, and controlling how land and water are used.
In the INFORM Risk Index from Floods, Thailand is ranked tenth worldwide.
Thailand is currently placed ninth internationally in the INFORM Risk Index from Floods, just below Vietnam, Burma, and Cambodia. The already high costs of floods and droughts to society are anticipated to rise in the absence of effective climate change adaptation.
By 2030, lost output from a large flood as catastrophic as the one that hit in 2011 might cost the economy more than 10% of its GDP. In particular, rice cultivation, which uses a lot of water and contributes around 9% of the world’s GDP, is especially vulnerable to water shortages.
In the Greater Bangkok area, where the majority of the population resides and the majority of the GDP is created, flood risks are also very significant.
