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Thailand’s economy experienced a slow but steady revival, primarily driven by private consumption

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28 Sept 2023

  • As for the general economy, it gradually continues to recover. The main driver being increased private consumption, a strong labour market and a moderately recovering tourism sector.

  • However, the situation is different when it comes to goods exports. Goods exports declined with 5.5% (year-on-year), making it the tenth consecutive month of contraction. The major reason behind the contraction this month being a decline in both manufacturing and agricultural exports.  

  • When it comes to the outlook for Foreign Direct Investments (FDI), it has mainly been supported by the economic recovery and investment promotion efforts.  There is an increased interest in certain targeted industries such as electronics, food processing, and the automotive sector in which the electronic vehicle supply chain stands out. 

  • The inflation continues to be very low, though a minor increase was seen in August. The reason behind the increase being rising energy and food prices. 

  • As seen from the first ten months, fiscal consolidation has progressed at a slow pace due to the implementation of energy subsidies. However, the central government's fiscal deficit decreased to 4.3% of GDP, compared to 6.2% in the same period last year. As for the public debt, it remained stable at 61.7% of GDP as of July. 

  • Regarding the newly formed government, they have set up policy priorities that aim to stimulate household spending. This includes a provided one-time transfer of 10 000 THB via digital wallets to all individuals aged 16 and above. This, together with additional cuts in energy prices, and by postponing debt repayments for (1) farmers; (2) small and medium enterprises; and (3) individuals for three years, all serves the purpose to reduce the cost of living in the country. However, some of these efforts would lead to increased fiscal costs. 

  • Lastly, Thailand´s current account balance recorded a deficit of 1.1% of GDP in July due to a declining goods trade surplus and increased deficits in services, primary and secondary income.  


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