Thailand’s economy continues to recover and is expected to strengthen further. GDP growth picked up to 2.2 percent in 1H 2023 and the output level has finally surpassed its pre-pandemic peak after growing by 1.4 percent in Q4 2022. The recovery was underpinned by resilient domestic demand and a rebound in tourist arrivals. Looking ahead, growth is expected to strengthen to 3.5 percent in 2023 and 3.9 percent in 2024. However, there are significant uncertainties stemming from both domestic and external factors that could affect the strength and trajectory of its recovery.

Inflation declined but is expected to remain within the 1-3 percent target range. Headline inflation is projected to decrease to an average of 1.6 percent in 2023 from 6.1 percent in 2022, mainly due to a drop in oil and food prices. Looking ahead to 2024, inflation is expected to remain within the Bank of Thailand’s (BOT) 1-3 percent target range, in line with the continued strengthening of the economic recovery and expectations of higher food prices. Nevertheless, the confluence of higher fiscal spending and a more severe El Niño can stoke inflationary pressures.

These conclusions are highlighted in the 2023 Annual Consultation Report on Thailand.