Research Briefing | Oct 4, 2023

What’s behind our cautious medium-term outlook on Thailand

We recently cut our 2023 full-year GDP growth forecast for Thailand after unexpectedly weak activity in Q2. The economy will likely see a rebound over the remainder of the year, but over the medium term we think the growth path will be modest. What’s underneath is the long-standing issue of Thailand’s ageing population and consequential decline in its labour force.

What you will learn:

  • Thailand’s economy is heavily reliant on tourism, but its recovery path from the pandemic-induced slump is still unclear. There are signs that supply capacity has been lost, to some extent permanently.
  • The modest outlook for domestic consumption demand combined with sufficient production capacity means there is little incentive for domestic manufacturers to invest. Meanwhile, foreign direct investment inflows continue to fall behind those of Thailand’s Asian peers.
  • We don’t think the announced policies will support structural change that could reverse a slowing growth trend beyond short-term stimulus.
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