Thailand Poised for Economic Uplift in 2024
The World Bank forecasts a bright outlook for Thailand’s economy in 2024, predicting a growth rate of 3.2%, up from 2.5% in the current year. This upswing is attributed to the resurgence of the tourism sector and a boost in goods exports, alongside steady private consumption, as detailed in the latest Thailand Economic Monitor.
2023 saw a slight dip in growth due to a decrease in goods exports and ongoing fiscal adjustments. The growth rate is anticipated to stabilize around 3.1% in 2025.
Inflation rates are expected to decline to 1.1% in 2024, with lower energy costs playing a significant role. Nonetheless, a rise in food prices is likely.
Thailand Digital Wallet Initiative
The introduction of a digital wallet initiative in Thailand, representing about 2.7% of the nation’s GDP, could further accelerate economic growth by 0.5 to 1 percentage points over 2024-2025. This, however, might increase the fiscal deficit to 4-5% of GDP and push public debt to 65-66% of GDP.
Risks to this economic forecast include potential geopolitical conflicts and high oil prices, which could trigger another inflationary wave due to Thailand’s reliance on energy imports. Transitioning to a low-carbon economy is seen as a strategic move to enhance energy security, reduce environmental harm, and establish Thailand as a leader in sustainable growth.
Thailand and Carbon Pricing
The report emphasizes the importance of carbon pricing, such as carbon taxes or emissions trading, in achieving significant reductions in greenhouse gas emissions. While carbon pricing is crucial, it may need to be supplemented by other measures to effectively reduce emissions.
Thailand aims to reach net-zero emissions by 2065 and reduce emissions by 30% by 2030. The revision of Thailand’s Climate Change Act in 2024 is expected to include carbon pricing as a key policy tool to achieve these ambitious goals.
Addressing air pollution, a significant economic and health concern, through carbon pricing could also improve urban air quality and reduce illness-related costs, which accounted for about 6% of Thailand’s GDP in 2019.
The revenue from carbon pricing could support various climate policies or public expenditures, potentially alleviating the financial burden on Thailand’s predominantly publicly funded healthcare system.
Thailand has taken initial steps towards comprehensive carbon pricing, including voluntary emissions trading since 2015. To meet its environmental targets, however, the country will require more ambitious policies.
