As we gaze into the crystal ball for Thailand’s economic forecast, it’s clear that 2023’s performance tiptoed around an array of challenges, with goods exports shrinking back like teenagers avoiding household chores. Despite this, economists are donning their optimistic hats, predicting the Thai economy will stretch its legs and grow by a sprightly 3.1% in 2025. It won’t be off to the races, but more of a determined power walk.
A peek at inflation tells a rather mellow story — with the ghost of inflation past pinned down at a tame 1.1% in 2024, thanks to energy prices behaving better than a well-trained labrador. Food prices, though, are displaying more of a rebellious streak and are expected to march upwards.
Tap-dancing into the details, Thailand’s economic boogie is set to shimmy up to 3.2% in 2024, a step-up from a more reserved 2.5% boogie this year. The rhythm to this growth is credited to the much-awaited encore of tourism and a swan-like resurgence in goods exports, buoyed by global trade winds. Meanwhile, private consumption is predicted to keep sashaying around a sturdy stage.
Yet, the spotlight stealer will be tourism — a scene-stealer not expected to belt out its pre-pandemic high notes until the spotlight hits the mid-2025 mark. This slight delay, critics say, is due to the cautious Chinese economic tempo.
Now for the thrilling plot twist. If the Digital Wallet scheme — a dazzling number promoted during the elections — kicks off in May 2024 with a budget of a cool 500 billion baht, the growth could hike up its skirt and sprint past the usual projections. This could, however, nudge the fiscal deficit up the hill to a 4-5% incline, reminiscent of the rocky path tread during the 2020-2022 COVID saga.
Something to chew on: strutting down the catwalk of geopolitical squabbles and lofty oil prices, Thailand could find itself in another inflation tango. But, in a fashion-forward move, sauntering towards a lower-carbon growth path could grace the country with the triple crown — energy security, environmental poise, and a leading role in the regional green growth gala.
In a special investigative report, sleuths uncovered that carbon pricing is key. It could sashay in via carbon taxes or emissions trading schemes (a swanky green stock exchange, if you will) to keep those pesky greenhouse gas emissions in check.
While Thailand is already tiptoeing on the carbon pricing dance floor, with voluntary emissions trading since 2015, the choreography could use a more ambitious routine. Emissions are waiting in the wings, ready for their cue to take a nosedive. Future steps could include jazzing up the electric vehicle scene or cultivating a workforce of solar panel installation virtuosos.
Citing Fabrizio Zarcone, World Bank’s maestro for Thailand affairs, “Thailand is cranking up the music with goals to hit a climatic high note — net-zero by 2065 and a 30% emissions cut by 2030”. As they orchestrate the Climate Change Act, re-releasing in 2024, carbon pricing is the headliner if they’re to sweep up the carbon neutrality charts.
The bounty collected from carbon pricing could fuel all sorts of climate initiatives or give a fiscal fist-bump to public spending. It might even take some of the load off Thailand’s healthcare system — currently holding out its hat for public funds.
Thailand’s eco-friendly policies are like the opening act, but what the crowd’s really waiting for is the main event — a comprehensive carbon pricing program. It’s a performance with high stakes, requiring ambition that matches the scale of their goals, and ensuring that the future emissions growth doesn’t throw a surprise party nobody wants to attend.
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