Krungsri Research Suggests Global and Thai Economic Trends in 2024 Will Rebound Amid Uncertainty – Stock Miti

Stock Dimension – Krunjsri research by Dr. Pimnara Hirankasi, Head of Economic Research Team, Bank of Ayodhya Public Limited Announcing the overall global economy in 2024. It is likely to grow low, similar to last year at 3.1%, along with a revision in the Thai economic expansion forecast to 2.7%, while the overall ASEAN-5 economy is still growing well at 4.7%

The global economy in 2018 2024 sees a low growth trend, similar to last year at 3.1%. This is a lower growth rate than the average of the ten years before Covid-19, which averaged about 3.7%, as the positive effects resulting from the opening of the country and stimulus measures during Covid-19 will gradually fade, while the negative effects resulting from many… factors, may hinder growth. Both the slowdown in the Chinese economy, the threat of economic recession in Europe, drought conditions caused by the El Niño phenomenon, the Russian-Ukrainian war, and tensions in the Middle East. Economic polarization led by the United States and China, which will affect global supply chains. It may cause fragmentation in the globalization trend. Globalization creates a multiplier effect on trade and investment around the world. In addition, the use of higher interest rate policies in many countries over the period 2023-2024 will affect the costs and burdens of public and private sector debt. Thus, the world in general and the economy still faces the risk of recession. However, inflationary pressures are likely to subside in 2024, which will help open the way for core countries to lower interest rates to prevent prolonged economic weakness.

The Thai economy tends to grow according to the economic cycle. Although the recovery is still not widespread and there is still a great deal of uncertainty. It is expected to expand 2.7% in 2024, compared to 1.9% in 2023, driven mostly by domestic factors. These include: (1) continued recovery of the tourism sector from government support measures and improved capacity to accommodate tourists. The number of foreign tourists is expected to rise from 28.2 million in 2023 to 35.6 million in 2024, although it has not yet returned to the pre-Covid level of 40 million. (2) Private consumption will still continue to grow at a rate of 3.1% , driven by the recovery of the tourism sector and increased job opportunities. In addition, there will also be positive results from government policies that help reduce the burden of living costs and measures to stimulate spending. (3) Government spending will play a greater role in driving the economy starting from the second quarter of 2024 after the issuance of the royal decree. The company's annual budget of 3.48 trillion baht (an increase of 9.3% over the previous fiscal year) was approved. This will result in public consumption and investment returning to expansion of 1.5% and 2.4%, respectively, from contraction in 2023, and (4) private investment is expected to grow by 3.3% in line with sector growth. and groups related to infrastructure investment including government policy aimed at promoting important industries. However, the export sector still tends towards low growth because it continues to face pressure from the weak economies of trading partners. Although there may be specific factors that support exports in some groups, such as the recovery cycle of electronic products, benefits from maintaining food security, economic cooperation in the region (regionalization), etc. Thai exports are expected to expand by only 2.5% in 2024 from a contraction of -1.7% the previous year.

Although the overall economy is gradually recovering, the growth rate has continued to trend below 3% since the outbreak of the Corona virus. Meanwhile, the average headline inflation rate for the whole of 2024 is expected to remain at a persistently low level of 1.1%, slowing slightly from 1.2% last year. To support continued economic recovery

Overall, the Thai economy is likely to improve in 2024. But the growth rate is still low compared to countries in the ASEAN region. Local factors that may put pressure on the growth of the Thai economy include high levels of household debt amid rising borrowing costs. The effects of dehydration may be more serious. Including structural problems such as population aging, labor shortages, and decreased competitiveness in many industries. As for external factors that may create risks in 2024, they include the impact of interest rates in the world’s major countries, which are the highest in more than two decades, which may It puts pressure on the global economy and the financial sector. The Chinese economy is slowing amid the fragility of the real estate sector, and economic polarization between the United States and China and geopolitical conflicts may expand in the future.

ASEAN Regional Economic Trends in 2024

For 2024, the ASEAN-5 economic growth rate is expected to reach 4.7%, an increase from the previous year's growth of about 4.2%, with domestic demand continuing to be an important driving force. In addition, exports are likely to rebound slightly after the supply slump is resolved. Purchasing power improved due to slower inflation. The pressures resulting from difficult financial conditions are likely to ease in the second half of this year. However, important challenges facing the regional economy include risks arising from external factors such as the global economy, which remains weak. Geopolitical tensions and the El Niño phenomenon. These factors will increase uncertainty about the region's growth prospects through financial and trade channels. In addition, fiscal policy will become increasingly important. To support supply challenges that are likely to occur frequently for monetary policy, US policy interest rates are at a high level and inflation risks from commodity price volatility may prompt most central banks in the ASEAN region to maintain official interest rates until mid-2024.

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