Thai economic growth in 2024 disappoints as trade risks loom

Thailand’s economic growth was weaker than expected in 2024 and continued to lag behind its neighbours’ as it faces a year fraught with risks from global trade policy hurdles and sluggish domestic demand.

South-east Asia’s second-largest economy grew 2.5 per cent in 2024, the National Economic and Social Development Council (NESDC) said on Feb 17.

That was slower than the median estimate for a 2.7 per cent gain in a Bloomberg News survey, although it picked up from a revised 2 per cent expansion in 2023.

Gross domestic product rose 3.2 per cent in the three months through December from a year earlier, against a 3.8 per cent forecast by economists.

The economy grew 0.4 per cent from the July-September period compared with a median estimate for a 0.5 per cent rise.

Even with the firmer recovery in tourism and exports, the nation remains a growth laggard in the region as household consumption and manufacturing continue to be under pressure.

In the latest phase of US President Donald Trump’s tariff policy and the US-China rivalry, Thailand is vulnerable, given its significant trade surplus with the US and the persistent flooding of cheap China-made products that may worsen as Washington hits Beijing with more levies.

Bank of Thailand Governor Sethaput Suthiwartnarueput said on Feb 16 that he considers trade policy spillover as a main challenge.

Import flooding is a factor constraining Thailand’s recovery, Mr Sethaput told a panel in Saudi Arabia, adding that the country’s manufacturing sector had been badly hit.

The local media had reported that thousands of Thai factories, which are unable to compete with cheap imported goods, have shuttered in the past few years.

Thailand, which posted a trade surplus of US$35.4 billion (S$47.39 billion) with the US in 2024, is planning to boost imports of US ethane and agricultural products to avoid getting in the cross hairs of Mr Trump, who has sought to impose tariffs on countries that sell more to America than they buy.

The state planning agency maintained its forecast expansion of 2.3 per cent to 3.3 per cent for 2025, according to NESDC chief Danucha Pichayanan at a briefing in Bangkok.

Energising domestic consumption would help drive growth in 2025, he said, as the agency forecasts a 3.3 per cent growth in private spending and a 1.3 per cent rise in government consumption.

Uncertainty from US trade policies is a key risk for Thailand, Mr Danucha said. “We will monitor closely and come up with measures to negotiate with US. We are under the spotlight as we recorded high trade surplus versus the US.”

The Thai baht was little changed after the data, while the main stock index opened lower.

At home, Thai Prime Minister Paetongtarn Shinawatra is seeking to boost growth with a series of cash handouts and by piling pressure on the central bank to lower borrowing costs.

The central bank, which kept the policy rate steady at 2.25 per cent in December after a surprise quarter-point cut in October, is scheduled to review the rate on Feb 26. BLOOMBERG