The University of the Thai Chamber of Commerce (UTCC) has trimmed its economic growth forecast for this year to 3%, down from 3.6% estimated in December last year, primarily because of lower than expected exports and delays in state budget preparation.
The downgrade takes into account new government measures to reduce the cost of living, such as electricity and fuel price reductions as well as debt suspension programmes, while revenue from foreign tourists is estimated to inject more than 100 billion baht into the Thai economy.
Thanavath Phonvichai, president of the UTCC, said delayed budget preparation for fiscal 2024 had a direct impact on government investment, while reduced exports and the drought are weighing on the economy, to the tune of 200 billion baht.
Accounting for the negative factors, Mr Thanavath said an estimated 99 billion baht has been pulled out of the economy, reducing GDP growth by 0.6 percentage points.
"From now on, we have to closely monitor the government's measures to see whether they can restore economic confidence and investment," he said.
Mr Thanavath said the university's GDP growth projection for 2024 remained at 4.5-5%, driven by the tourism sector.
He said revisions of next year's forecast require more clarity on the 10,000-baht digital wallet policy, especially the source of funding, including whether it is from the budget or a combination of budget and off-budget sources.
This will have implications for public debt and its impact on the Thai economy, said Mr Thanavath.
In a related development, the university's latest survey on public perceptions of the cost of living policies found the greatest concern is food and essential item prices, followed by public transport costs and debt burdens.
The country's economy was also a significant concern.
The recent measures to cut diesel prices by 2 baht per litre and lower electricity costs were seen as effective in easing the cost of living, according to the survey.
Respondents feel the visa waiver for Chinese and Kazakh tourists could lift the overall economy, while the digital wallet handout may also have a significant economic impact, though its effects are anticipated during 2024, Mr Thanavath said.
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said the GDP projection for 2024 of around 5% aligns closely with the government's target.
Stimulus measures such as the digital wallet policy, if implemented, could increase GDP by 2-3 percentage points, he said.
If export conditions improve next year and there are no complicating factors in the global economy, particularly geopolitical conflicts, it is possible to achieve a growth rate of 5%, Mr Sanan said.