Citibank confirms Thai economic growth target of 4.3% in 66, 23 million tourists, risk of "inflation"

Citibank There is an outlook for the Asia-Pacific region's economy in 2566. The overall picture is in a positive direction. Due to the end of monetary policy adjustments in many countries and the trend of continued investment growth in many economies. As for China's opening up, it will likely result in low economic growth in the region in the first half of 2566.

Meanwhile, the overall economy of Thailand tends to grow continuously. Citi maintains its Thai GDP growth forecast at 4.3%, with positive signs that headline inflation will fall to an average of 2.5%. However, Citi analysts still recommend that measures be put in place to cushion against risks from slowdown of the world economy

Ms. Johanna Chua, Head of Asia Pacific Economic and Market Analysis of Citigroup said that the overall economy in the Asia-Pacific region in 2566 is expected to grow GDP at 4.4%, a slight increase from 3.5% in 2565, despite factors that may cause fragility, such as the war between Russia and Ukraine. Conflict between China and the United States or an increase in product prices But it is expected that the regional economy will recover and grow continuously. This is a result of the end of monetary policy tightening in most countries around the world in 2566, including the Federal Reserve.

In addition, the depreciation of the US dollar In the second half of 2566, it will reduce the pressure on central banks in each country. Meanwhile, the opening of China in the second half of 2566 will not have a significant impact on economic growth within the region. But this may cause the inflation situation in ASEAN economies such as Singapore, Vietnam, and Thailand to last longer.

Ms. Johanna added that for the outlook for investment and international trade in 2566, Citibank expects a slowdown led by the technology sector until mid-2566 before a gradual recovery in the U-shape in the second half. of the year. It also foresees relatively strong investment trends in two countries in the region to watch, namely India and Indonesia, with India expecting to invest more in fiscal year 2566 as well as increasing production capacity. and foreign direct investment at a record high Indonesia is expected to see more foreign investment into the supply chain of low-carbon steel and electric vehicle battery industries.

Ms. Nalin Chatchotitham, economist Citibank Thailand said that the overall Thai economy in 2566 is likely to grow continuously. After opening the country more fully It still estimates GDP growth at 4.3%, which comes mainly from the recovery of the tourism sector. It is expected that there will be approximately 23 million tourists in 2566, an increase from approximately 2565 million in 10.1.

In addition, there will be momentum from household spending from the recovery of service sector income. The export sector tends to slow down. This may have some impact on private investment. But it is expected that investment will still be supported by the long-term development plan of the BCG business group that has been promoted by the government and the EEC project.

As for the current account balance in 2566, it is expected to return to a surplus of about 3.8% of GDP despite the slowdown in the export sector. but still benefit from income from the tourism sector Decreased transportation expenses in the service balance and a trade deficit that tends to narrow due to lower commodity import prices.

However, the Thai economy may still face some risks from inflation. If the price of energy increases This is despite Citi's base case forecast that headline inflation will drop to an average of 2.5% in 2566.

Citi also expects that the Bank of Thailand will adjust the policy interest rate to 2.25% within the third quarter of 3, which will be a gradual adjustment. In a situation where the liquidity of domestic money is still at a high level. This should help reduce the impact on businesses and households. However, if economic expansion is weaker than expected, Thailand's fiscal position still has some room left to support or stimulate the economy.