Analysis of Global and Thailand's Economic Prospects (Third Quarter of the Year)

List of Key Chapter Titles

1. Global Economic Outlook
2. Thailand's Economic Growth Trends
3. Thailand's Export and Industrial Production Performance
4. Thailand's Private Consumption and Investment Dynamics
5. Thailand's Agricultural Income and Livelihood Conditions
6. Thailand's Government Economic Stimulus Policies
7. Inflation and Monetary Policy Direction
8. Analysis of Thai Baht Exchange Rate Fluctuations
9. Structural Challenges in Thailand's Automotive Industry
10. Development Difficulties of Thai Small and Medium Enterprises (SMEs)
11. Impact of Geopolitical Risks on Global Trade
12. Potential Impact of Natural Disasters on Thailand's Economy

Document Introduction

This report, released by the SCB Economic Intelligence Center (SCB EIC) in September 2024, focuses on the global and Thai economic development prospects for 2024-2025. It provides an in-depth analysis centered on the feasibility of a global economic soft landing, geopolitical shocks, monetary policy adjustments, and Thailand's structural economic challenges. Based on data from the IMF, Bloomberg, central banks of various countries, and official Thai government statistics, combined with field research and model forecasts, the report serves as an authoritative reference for policymakers, researchers, and businesses.

Regarding the global economy, growth is expected to slow in the second half of 2024, but the probability of a soft landing remains high. Full-year growth is projected at 2.7% for 2024, with a slight acceleration to 2.8% in 2025. Key supporting factors include the resilience of core economies from earlier growth, declining inflation, and the initiation of central bank interest rate cut cycles. However, prolonged geopolitical conflicts and escalating trade protectionism have led to medium-term growth potential falling below historical averages. Rising unemployment in the US has raised recession concerns, but increased labor supply from immigration and relatively stable demand have mitigated the risk of a hard landing.

Thailand's economic growth remains persistently weak, with projected growth rates of 2.5% and 2.6% for 2024 and 2025, respectively, below both the global average and countries with similar income levels. Tourism continues to be the core growth engine, with an expected 39.4 million international tourist arrivals in 2025. However, the slow recovery of Chinese group tourists poses a constraint. Declining export competitiveness, high industrial inventories, weak private consumption, and expected declines in agricultural income collectively suppress economic growth momentum.

On the policy front, the Bank of Thailand is expected to begin an interest rate cut cycle starting in December 2024, with the policy rate projected to fall to 2% by the end of 2025. Stimulus policies such as the digital wallet scheme are expected to have limited and temporary effects. Intensifying government fiscal constraints have pushed public debt close to the 70% of GDP warning threshold. Structural challenges are prominent: the automotive industry faces a risk of losing 40% of its production capacity, while SMEs grapple with a triple pressure of weak domestic demand, intensified import competition, and technological backwardness, highlighting the lag in economic transformation.

The report also warns that external shocks, including persistently high global geopolitical risk indices, expanding international trade frictions, and extreme weather events, could further weaken Thailand's economic resilience. A coordinated policy response combining short-term stimulus with long-term competitiveness enhancement is required.