BANGKOK, July 3, 2024 – Thailand’s economic growth is expected to accelerate in 2024, driven by sustained consumer spending, the tourism industry’s measured recovery, and a rebound in exports, the World Bank said today in a new report.
Gross domestic product is projected to advance 2.4% in 2024, up from 1.9% growth in 2023, according to the World Bank’s Thailand Economic Monitor. The latest forecast is a 0.4 percentage point downgrade from figures released in April, largely due to weaker-than-expected exports and public investment early in the year.
Inflation is projected to decline to 0.7% in 2024, down from 1.3% the previous year and the lowest in the region due to lower-than-expected food and energy prices alongside the gradual pace of recovery, before rising to 1.1% in 2025.
In 2024, tourist arrivals are expected to surge to 36.1 million, well above the 28.2 million arrivals in 2023 and nearing their pre-pandemic peak. Total arrivals are expected to reach 41.1 million next year, surpassing the pre-pandemic level, as Chinese visitors return in larger numbers.
Economic growth is expected to reach 2.8% in 2025, supported by stronger demand at home and overseas, as well as increased government spending. While Thailand’s public debt is projected to remain sustainable, the government faces increasing pressure for social spending and public investments to support an aging population.
“Thailand is at a pivotal moment needing to address key challenges including productivity and a decline in the working population due to an unfavorable demographic trajectory," said Fabrizio Zarcone, World Bank Country Manager for Thailand. "As the clock ticks it will be critical to rejuvenate its economic growth and Thailand’s secondary cities hold significant untapped potential that is key to getting the country back on the path of sustainable development."
A special section of the report highlights the potential of Thailand’s secondary cities and their essential role in bolstering the country's future growth. The 2011 floods in Bangkok underscored the economic vulnerability of concentrating too much in a single city, emphasizing the need to diversify growth across multiple urban centers.
Many of Thailand’s secondary cities are already regional centers of economic activity with diverse industries. Recently, per capita GDP growth in these secondary cities has been nearly 15 times higher than in Bangkok. With appropriate investments in infrastructure, human capital, and institutional capacity, these cities can further enhance Thailand’s productivity and economic growth.
The report highlights a series of recommendations that could help bolster Thailand's long-term growth prospects in secondary cities, including decentralizing investment decisions and granting greater fiscal autonomy to cities.
"Empowering Thailand’s secondary cities would be a significant paradigm shift so that they have the powers, flexibility, financial resources, and infrastructure they would need to attract their share of investment and talent," said Poon Thingburanathum, Deputy Director of Corporate Planning at Thailand’s Program Management Unit on Area-based Development. “With appropriate investments in infrastructure, human capital, and institutional capacity; and with adjustments to the intergovernmental framework, a number of these cities have the potential to significantly enhance Thailand’s productivity, spur its economic growth, and bolster its global competitiveness.”
