Slow Growth Amid Rising Geopolitical Risks

Executive Summary

As inflation nears central bank targets, a significant policy shift is underway. Major central banks in advanced economies have begun cutting policy rates to adopt a neutral stance, supporting economic activity amid rising unemployment. This easing of global monetary conditions is also benefiting emerging markets, strengthening their currencies against the US dollar and improving financial conditions, which will help reduce imported inflation and facilitate their own disinflation efforts.

The International Monetary Fund's (IMF) World Economic Outlook Report projected the global growth of 3.2% for both 2024 and 2025 even though some developing countries have seen a downgraded growth revision. China faces significant challenges in achieving its annual GDP growth target of 5% in 2025, whereas Japan's 2024 GDP is forecast to exhibit a slight uptick of 0.3%.

Meanwhile, the global headline inflation is projected to reach 3.5% by the end of 2025, below the average level of 3.6 percent between 2000 and 2019.

Thailand's 2024 economic growth is projected at 2.6%, and 2.3-3.3% for 2025 driven primarily by continued expansion of domestic consumption and the tourism, and supported by government stimulus mesures. Nevertheless, the recovery is uneven across sectors, and the persistence of global trade wars and geopolitical tensions, combined with Thailand's elevated household debt, poses a significant risk that warrants close monitoring.
 

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