Gross domestic product grew 3.0% in the third quarter from a year earlier, National Economic and Social Development Council (NESDC) data showed on Monday, accelerating from revised annual growth of 2.2% in the second quarter, and beating the median forecast of 2.6% growth in a Reuters poll.
The growth in Southeast Asia’s second-largest economy was driven by a rise in the service sector while the industrial sector decelerated and agricultural production dropped, the state planning agency NESDC said in a statement.
The economy will continue to grow in the final quarter of 2024 but there are risks ahead, including from U.S. economic policies, NESDC head Danucha Pichayanan told a press conference.
“Next year, there will likely be more risks. Budget spending to boost the economy will have to be more targeted,” he said.
On a quarterly basis, GDP expanded a seasonally adjusted 1.2% in the third quarter, the fastest pace in 18 months, and above both a poll forecast and previous quarter growth of 0.8%.
“The momentum in the fourth quarter should be stronger and annual GDP will probably reach 4%”, said Chamadanai Marknual, economist at Krungthai Bank.
“But the picture for next year is unclear due to uncertainty over the trade war and government measures,” he said.
The main stock index was up 0.8%, while the baht had strengthened 0.2% against the dollar.
The agency forecast GDP growth of 2.6% this year, inside the previous forecast range of 2.3% to 2.8%, and projected growth of 2.3% to 3.3% in 2025.
Last year’s growth of 1.9% lagged regional peers. The economy has struggled under high household debt and borrowing costs as well as sluggish demand from major trading partner China.
After sustained government pressure, the central bank unexpectedly cut its policy interest rate by a quarter point to 2.25% on Oct. 16.
Finance Minister Pichai Chunhavajira has said the government will meet to consider more stimulus measures on Tuesday, including the second phase of its “digital wallet” handout scheme.
The flagship programme, which will give 10,000 baht ($287) each to about 45 million people to spend in local communities, launched in September and about one third of the payments have already been made.
Tourism and exports, key drivers of Thai growth, are expected to continue to support the economy next year.
The NESDC increased its export growth forecast to 3.8% this year from 2% seen earlier, and said exports were expected to rise 2.6% in 2025.
The agency projected 36 million foreign tourists this year, trimming a previous forecast of 36.5 million, and saw that increasing to 38 million visitors in 2025.
Thailand posted a record of nearly 40 million foreign tourists in 2019, before the pandemic.
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