The University of the Thai Chamber of Commerce (UTCC) has trimmed its economic growth estimate for 2023 to 2.5%, down from the earlier forecast of 3% it made in October last year, while projecting growth of 3.2% this year.
Thanavath Phonvichai, president of the UTCC, attributed the downgrade to the lower than expected rate of GDP growth in the third quarter of 2023, which stood at 1.9%.
The slow recovery of Chinese tourist arrivals and reduced fiscal drive given the absence of a fiscal 2024 budget have weighed on consumption and state investment, which also contributed to the decline, he said.
A continuous decrease in inventory levels, especially in the industrial goods category, resulted from producers being uncertain about demand for new products. This uncertainty led to a delay in production and the release of existing stock, Mr Thanavath said.
Thai exports are projected to contract by 0.9% in 2023, while inflation is estimated at 1.3%, household debt at 89.8% of GDP, and foreign tourist arrivals at 28 million, according to the UTCC.
He said one factor supporting Thailand's economic growth last year was private sector spending, both in consumption and investment, which continues to grow. Exports turned positive in the fourth quarter, contributing to economic expansion.
Mr Thanavath said private consumption was a significant driver of the country's economy in 2023, boosted by a rebound in exports late in the year.
According to the Commerce Ministry's latest data, Thai exports rose for a fourth consecutive month in November, up by 4.9% year-on-year to US$23.5 billion, while imports increased by 10.1% to $25.9 billion, resulting in a trade deficit of $2.39 billion.
For the first 11 months of 2023, exports fell by 1.5% to $262 billion, while imports dipped by 3.8% to $268 billion, resulting in a trade deficit of $6.16 billion.
"This year, we forecast a growth of 3.2%, but this excludes the impact of the digital wallet project. Exports are expected to grow by 3%, the general inflation rate is projected to be at 2%, household debt is estimated to decrease to 87.8% of GDP, and international tourist arrivals are expected to reach 35 million," he said.
Factors supporting the economy in 2024 include a clear recovery in the tourism sector, continued expansion of private consumption, resilient private sector investment, positive growth in exports, a stable inflation rate, and government stimulus measures to boost the economy.