2024 Thailand’s Economic Outlook and Emerging Technology Trend

Dr. Narain Chutijirawong
Executive Director | Clients & Markets
Deloitte Thailand

Tasada Sangmanacharoen
Senior Consultant | Clients & Markets
Deloitte Thailand

The Thai economy in 2024 is still recovering slowly and growing below expectations. The Bank of Thailand has lowered its GDP forecast for 2023 and 2024 to 2.4% and 3.2%, respectively. However, if the Digital wallet project is included, the GDP growth in 2024 could reach 3.8%. Tourism, which was a major driver of the Thai economy before the pandemic, is still a concern. Although Malaysia currently has the largest share of foreign tourist arrival, with 4 million visitors in November 2023, this figure is only 8% higher than the pre-pandemic level in November 2019. In addition, Malaysia is ranked highest because the number of Chinese tourists has decreased by more than 30% from the year before Covid-19. This is due to factors such as the slowing China’s economy, negative inflation for more than two months, and the ongoing property crisis, which have led to a significant decline in purchasing power and demand for overseas travel, or a greater interest in travelling to other destinations. These pose a challenge to the number of tourists in 2024, which may not reach the pre-Covid peak of 39.9 million.

As for exports, according to data from Trade Policy and Strategy Office, Ministry of Commerce, although the value of 10M2023 still contracted by 2.7% compared to the previous year, it has started to show signs of improvement from the recovery of the electronics cycle. Thailand also has the highest export share of electronic appliances to the Thailand’s total export value of all industrial goods. Thailand’s total value of exports of all types of goods in October 2023 also grew by 8.0% YoY.

However, one of the most important factors in the low economic growth is the household debt problem. According to data from the Bank of Thailand, Thailand's household debt reached 90.9% of GDP in the third quarter of 2023 at 16.2 trillion baht, which has a negative impact on consumer purchasing power.

Thailand's inflation rate in December 2023 was -0.83%, which has been negative for three consecutive months and the highest in 34 months. This has led to debate if Thailand is in a state of deflation. One of the main reasons for the decline in inflation is due to government energy measures that have lowered the prices of energy products, such as diesel and E10 gasoline, as well as lower food prices than the previous year. However, we may feel that some products are still expensive even with a negative CPI change value. This is because the base value of last year was high.

However, Deloitte views that private consumption and tourism will remain the main engines for GDP growth in 2024. We expect that private investment will also play a greater role in supporting economic growth, such as the increase or opening of electric vehicle manufacturing plants from China in Thailand, such as Changan, GAC, GWM, and Rever. In addition, data from the Board of Investment (BOI) shows that investment promotion certificates issued in 9M2023 increased by 0.4% YoY. The electrical appliances and electronics has the highest value at 130.4 billion baht. In addition, BOI certificates applications value also increased by 22% YoY, compared to 9M2022.

Recently we have seen the advent of accelerated computing that is driving massive advancements in AI technology and unleashing its full power that organization must learn how to capitalize it. This will boost the firms’ productivities, re-imagine their products and business models, hence directly impact to the country’s economy as a whole.

The emergence and rapid advancement of Generative AI has unlocked a host of new marketplace applications and surge of productivity growth. Last year, we have experienced about the power of Generative AI or GenAI from ChatGPT which its database was GPT3, and now GPT4. The key differences are not only the amount of data increase but also the type of input & output has dramatically improved – from text input only, now we can use image or voice as an input to GenAI as we have seen in Google Gemini, plus it will give us different type of output; text, image or even video clip.

AI will change the future of work in different ways, starting from the workforce. IQ is used to be a key indicator to predict your success in work, but with AI’s power, it can do this part for you. Now the focus will shift to EQ, your mindset and soft skill. People need to reskill themselves to learn how to make use of AI. You might not lose job to AI but chances are, the person who know how to use AI might take your job away.

It is important that we see AI as our companion to help us improving work efficiency. It is more like a ‘co-pilot’, not only it can assist us in automating some tasks but also perform basic and tedious tasks (e.g. collecting data from various source). As Deloitte, we call it ‘The Age of With’, the era where human and intelligent machine together can achieve things greater than what either could do alone.

Based on Deloitte and Fortune magazine CEO survey in June and October 2023, Generative AI is no longer a buzzword for CEOs, it’s becoming a reality. CEOs are moving from evaluation and experimentation to broader adoption. The area that GenAI has been used widely are increasing efficiencies, task automation, reducing business operational costs and discovering new idea/insights as well as accelerating innovation.

Deloitte’s recent article about AI – The Generative AI Dossier – will give the compelling emerging use cases and applications in various industries that promise to enhance productivity, amplify creativity and accelerate the pace of business innovation. Already a number of use cases around developer productivity, fraud detection, supply chain optimization, smart factory among others are being considered for deployment with anticipated significant benefits.

As Generative AI evolves, commercial use is impacted by emerging ethical, legal and policy considerations. Deloitte is committed to the safe and responsible use of Generative AI, guided by its Trustworthy AI framework which helps develop necessary safeguards and balance competing ethical priorities during product development and operation.