ttb analytics sees the Thai economy recovering slowly, competing with “Chinese products” is difficult.

Bangkok, ttb analytics sees the Thai economy recovering slowly, competing with "Chinese products" is difficult, facing challenges in all areas. Economic forecast for 2024 expands at 2.6%. The TTB Economic Analysis Center or ttb analytics estimates that even though the overall economy in 2023 still has enough support from private consumption following the recovery of the tourism sector. But overall spending of the public sector shows signs of becoming more fragile. The current Thai economy has not yet returned to the level before the COVID-19 crisis. Even though the current level of economic expansion can close the output gap, (The output gap or Output Gap refers to the difference between the current economic growth and potential level) but the closing of the Output Gap compared to the new potential level decreases. That is, the Thai economy tends to slow down more every time. There's a crisis. This causes the short-term economic recovery to be very slow. In the long run, it is likely to expand at a low rate, averaging less than 2.0% per year. In addition, the momentum of the Thai economy is recovering more slowly than many other countries, most of which are likely to grow better than in the past. ttb analytics estimates that the Thai economy in 2024 is likely to expand by 2.6%, an improvement from the previous year's expansion of 1.9%, but the recovery is relatively slow and there are still risks in every aspect. Even though the economy at the beginning of the year gained momentum from consumption and tourism that improved due to the benefits of the festival period. But the driving force for short-term economic growth may only be the recovery of the tourism sector, which is still highly uncertain. Meanwhile, overall investment recovery was delayed. Including exports, there is a limited tendency to expand. As for inflation in 2024, it is likely to be lower than the target frame. But it has not yet entered a state of deflation. It is expected that headline inflation will be at 0.8% amid much tighter monetary polic y implementation. This results in the real interest rate. Thailand's (relative to core inflation rate) is currently around 2.0%, which is higher than comparable countries like Malaysia and South Korea. and higher than the United States at 1.0%. In addition, the structure of the Thai economy has changed significantly. If we consider the economic growth numbers that do not include the effects of Change in Inventory and Statistical Discrepancy, it will be seen that the numbers on the demand side (Demand Side) are different from the growth of the economy. on the supply side (Supply Side) obviously starting in 2022, as inventory changes and statistical margins play a greater role in economic growth. This is reflected from the figures for economic growth on the supply side in 2023, expanding only 2.1%YoY, while economic growth on the demand side expanded to 4.5%YoY. These reflect the adjustment of the business cycle relatively slowly compared to Economic activities on the demand side are flexible according to econ omic conditions and social behavior. Domestic manufacturers lose their competitiveness from Chinese imports entering the Thai market. The adjustment of the structure of the Thai production sector is slow, making it difficult to compete. Including taking advantage of Thailand's customs import tax exemption regulations. As a result, Thailand's imports of consumer products from China have continued to increase, averaging as high as 13 billion US dollars per year, or 20% of the total value of imports from China. Thailand's imports of goods from China grew by an average of 9.2% during 2020-2023, representing an import value of up to 70 billion US dollars. As a result, Thailand has the highest trade deficit with China of any major trading partner, or a trade deficit of approximately 37 billion US dollars in 2023. ' Domestic traders also began to face restrictions from China's direct entry into the domestic market. If considering the numbers in the economic growth sub-categories on the supply side, it is found tha t activities in the retail and wholesale sectors in 2023 expanded well up to 3.8%YoY, contrary to activities in the manufacturing sector. (Manufacturing) shrank 3.2%, which was partly due to the popularity of purchasing products through online channels. Domestic traders are also facing tougher competition. and must face more intense domestic competition This is because the risk of Chinese products flooding into Thailand will likely increase. (Both dimensions of volume and distribution to other industries are increasing) as a result of the Chinese economic slowdown and geopolitical issues,' the report states. Source: Thai News Agency