Chamber estimates Thai growth to accelerate next year

The University of the Thai Chamber of Commerce (UTCC) forecasts Thai economic growth of 3.6% in 2023, up from an estimated 3.3% this year, driven largely by the tourism revival, growing exports and a recovery in private consumption.

According to Thanavath Phonvichai, UTCC president, the forecast assumes global trade growth of 2.5% in 2023, down from estimated growth of 4.3% this year, with global GDP expected to expand by 2.7%, down from 3.2% in 2022.

The Thai exchange rate is expected to stay at an average of 35.95 baht per US dollar in 2023, compared with an estimated 35.15 baht this year, with Dubai crude oil prices at $92.50 per barrel, down from $97.5 a barrel in 2022. Thailand’s policy rate is forecast to be in a range of 1.25-2.00% next year, compared with an average of 0.50% in 2022.

“The export sector is expected to become just a supporting actor from the fourth quarter of this year onwards, from a hero during the first three quarters,” said Mr Thanavath.

“Private consumption and tourism, meanwhile, are likely to maintain recovery momentum until next year.”

The UTCC forecasts Thai GDP growth of 3.3% this year, up from the 3.1% projection in June, with exports expanding by 8%, inflation at 6.1%, and 11 million foreign tourists arriving.

He said the UTCC expects the country’s exports to grow by 1.2% next year, with imports increasing by 2.2%, down from an estimated 17.8% expansion in 2022.

Government investment is predicted to rise by 2.4% in 2023, from an estimated 0.4% this year, and private investment is set to expand by 3.2%, down from 4.0% in 2022.

Headline inflation is forecast to be 3.0% on average next year, while the number of foreign tourists is projected to hit 22 million.

Mr Thanavath said supporting factors for the Thai economy in 2023 include: an improving pandemic situation, a rise in the number of international tourists, a clearer recovery of private investment, higher farm income, reduced drought prospects, and increased money circulation from next year’s general election.

The university previously projected the general election slated for the second quarter of next year would generate at least 40 billion baht in spending, adding 0.4 to 0.6 percentage points to economic growth in 2023.

He warned there are a spate of negative factors, such as the ongoing Russia-Ukraine war, which has triggered rising prices of energy and commodities; central banks continuing to hike policy rates; a looming worldwide recession; an uncertain recovery of China’s economy; and volatile global monetary and capital markets.