The World Bank is lowering its economic growth forecast for Thailand this year to reflect the delay in fiscal budget disbursement and external risks, noting that Thai interest rates are appropriate, though the government should come up with targeted economic measures.
Kiatipong Ariyapruchya, the bank's senior country economist for macroeconomics, trade and investment, said the revised GDP growth would be "on the low side", reflecting the delayed government budget.
Mr Kiatipong declined to say whether the updated forecast, which is scheduled for April, would fall below 3%. In December 2023, the bank slashed its 2024 Thai GDP growth outlook from 3.5% to 3.2%.
Although Thailand's exports have shown signs of improvement, shipments have not yet returned to the level expected and the ongoing economic slowdown in many countries as well as trade tensions are likely to diminish prospects for the remainder of this year. Meanwhile, inflation could rise given the geopolitical situation, pushing up oil prices.
While the government's planned digital wallet scheme was not included in World Bank's GDP projection for Thailand this year, Mr Kiatipong recommends the government introduce economic measures that target vulnerable groups instead of a broad-based programme, as well as stepping up infrastructure investments across the country.
The 10,000-baht digital handout would increase the country's GDP by 1%, but it would be a temporary bump rather than a sustained one, he said. There is room to invest in infrastructure, innovation and human capital, said Mr Kiatipong.
He said interest rates in the country are at an appropriate level for the economy and are "neutral". The declines in the country's consumer price index (CPI), which fell for a fifth straight month in February, are temporary and the CPI should return to normal levels, said Mr Kiatipong.
"This is disinflation, which is a temporary effect," he said, as the bank forecasts inflation to return to a regular level.
Fabrizio Zarcone, World Bank's country manager for Thailand, said the bank is close to approving a US$170-million loan to support the construction of two bridges in southern Thailand. The project is expected to be endorsed by the cabinet next week.
The International Finance Corporation (IFC), part of the World Bank Group (WBG), jointly organised a a green loan facility of $64 million to develop renewable energy projects in Thailand, Indonesia and Vietnam.
The financing package includes an IFC loan of up to $32 million (1.2 billion baht) and a parallel loan from Siam Commercial Bank for a similar amount.
In related news, Thailand won a vote to host the annual meetings of the International Monetary Fund (IMF) and the World Bank Group in October 2026.
The events bring together central bankers, finance ministers and leaders from the private sector to discuss the most pressing issues facing the global economy, including growth, financial stability, climate change and digitalisation.