The SCB EIC notes that the Thai economy in 2024 will recover slowly, with the government's investment and production sectors shrinking.

Economic and Business Research Center Siam Commercial Bank or SCBEC Bank He revealed that the Thai economy in the fourth quarter of 2023 expanded by only 1.7% compared to the same period last year, or decreased by 0.6% compared to the previous quarter on a seasonally adjusted basis. The Thai economy in terms of expenditure (expenditure approach) at the end of 2023 continues to receive important support from the continued good expansion in private consumption. Consumer confidence was determined by the number of tourists and an improvement in the unemployment rate, in addition to the return to expansion of merchandise exports. However, the Thai economy is under great pressure as a result of the sharp contraction in government spending, both in terms of consumption and investment. As public investment continues to contract sharply, this comes following a decline in government investment due to the delay in announcing the budget spending law for the fiscal year 2024.

Relative to GDP in production (production approach), the services sector expanded well. Especially services related to tourism, wholesale and retail trade. Meanwhile, the construction sector contracted sharply after a decline in government construction. Especially government construction and the agricultural sector turned around and shrank as expected. Due to the hot and dry weather conditions that occurred during the first eight months of 2023, the production of many crop types decreased. Moreover, the industrial sector continues to contract after production for export contracted.

but, SCBEC Bank The Thai economy is expected to expand higher in the first quarter of 2024 than the previous quarter. There is continued support from private consumption, which is expanding well. This is in line with the recovery of the tourism sector, which is accelerating mainly from Chinese tourists. Especially in February, which benefits from the Chinese New Year Festival. Including the return of tourists from many countries to near normal levels. Including the consumer confidence index, which continued to rise. This is partly due to relief and economic stimulus measures, such as measures to reduce the cost of living. Especially energy and the Easi e-receipt project to stimulate spending. In addition, the Thai economy is supported by exports that have returned to expanding continuously, but there are still factors pressuring the Thai economy in this quarter. Given the delayed issuance of the 2024 budget law, the government's momentum in supporting the economy is likely to be slow during the first four months of the year. 2024 Pressure on government consumption and investment

SCB EIC estimates that the Thai economy in 2024 will recover slowly, driven by private consumption following the recovery of the service sector from foreign tourists, which is likely to continue to recover, and tourism in countries visiting Thailand continues to grow well. Private investment has rebounded following the trend of government investment approvals.Investment Authority Office (Board of Investment) and exports are recovering from the trend of expanding global trade following the recovery of the manufacturing sector and global trade. However, we must monitor supply chain risks from the Houthi attack and the drying up of the Panama Canal

While the pressure factor on the Thai economy comes from government investment, which is likely to shrink after the delayed passage of the 2024 Budget Law, which led to the general trend of supporting the economy from limited government spending in the first half of the year. Before it was possible to accelerate spending after the issuance of the 2024 Budget Law during the months of April and May, especially in the field of investment, but it will not be possible to accelerate it completely within a limited period of time. In addition, the government sector will face more budget restrictions due to the high level of public debt after the Covid crisis. In addition to the supply side in Thailand. The economy is still weak. In particular, the manufacturing sector has continued to contract in many industries and there is still no clear sign of recovery. This will be an important factor putting pressure on the Thai economy, which is likely to recover slowly in the coming period.