Thai Economic Performance - Thailand
Thai Economic Performance in the first half of 2024 and Outlook for 2024-25
The National Economic and Social Development Council (NESDC) reported the Thai Economy in the second quarter of 2024 expanded by 2.3% y-o-y, accelerating from 1.6% in the first quarter. After seasonally adjusted, the economy increased by 0.8% from the first quarter of 2024.
In the first half of 2024, the economy grew by 1.9% driven mainly by private consumption and tourism related services. Exports of goods also improved in the second quarter, from a 1.1% decrease in the first quarter to a 4.5% growth. However, the production of export-oriented products such as motor vehicles, electronic components, and articles of concrete remained negative. Investment, both public and private, also contracted.
For the latter half of 2024, Thailand's economy is expected to grow more robustly, supported by sustained private consumption and the continual recovery of tourism and good exports. Public investment and government consumption will also pickup from a delay in the budget approval. Political uncertainties may temporarily reduce investor and consumer confidence, but the main risks include geopolitical tensions, elections in various countries that might shift political power, persistently high-interest rates, and a potentially continuing contraction in the manufacturing sector.
Overall the Thai economy is projected to accelerate from 1.9% in 2023 to 2.3-2.8% in 2024. Growth is expected to reach 2.8-3.0% in 2025, supported by both domestic and external demand. Private consumption and tourism will be key drivers but their pace will be slow. Goods exports are expected to rebound due to favorable global trade. Tourism is projected to return to pre-pandemic levels in mid-2025, later than expected due to especially the lower number of Chinese tourists compared to pre-COVID-19.
For more info, please see:
• NESDC: Thai Economic Performance Reports
• Bank of Thailand: Thai Economy Conditions, Indicators and Outlook
• The World Bank: Thailand Monthly Economic Monitor Reports
The Netherlands-Thailand Trade and Investment
Trade in goods
Thailand is the 3nd largest trading partner and destination of Dutch merchandise exports to ASEAN (after Singapore and Vietnam). Thailand has a trade surplus over the Netherlands. In 2023, the value of merchandise trade between the Netherlands and Thailand was around 6.4 billion EUR, increasing 4.2% from 2022. The Dutch exports to Thailand grew significantly by 33.0%, to 2.2 billion EUR in 2023 from 1.7 billion euros in 2022. However, the Dutch imports from Thailand declined 6.6%, to 4.2 billion EUR in 2023 from 4.5 billion EUR in 2022.
From January to June 2024, the value of total trade between the two countries was 4.4 billion EUR, already surpassed half of the full year trade in 2023. Of this amount, 3.4 billion EUR was the value of Dutch imports from Thailand (increasing 79.9% from the same period of 2023) and 951 million EUR was the Dutch exports to Thailand (decreasing 28.3%). See the table below.
Image: ©CBS The Netherlands’ trade with ASEAN in 2024
Thailand’s main import items from the Netherlands are industrial goods. In the first half of 2024, the top five import items were: electronic integrated circuits; chemicals; machinery and parts; medicinal and pharmaceutical products; and electrical machinery and parts. Principal agricultural imports from the Netherlands are animals and animal products; milk and dairy products; fruits, vegetables and their preparation; fertilizer and pesticides; and other food.
Similarly, Thailand’s top export items to the Netherlands are concentrated on industrial products. These included: computers and parts; electrical transformers; teleprinters and telephone sets; electrical equipment and parts; and electronic integrated circuits. For agricultural products, key exports were prepared poultry and rubber products.
Trade in services
Unlike trade in goods, the Netherlands has a trade surplus over Thailand on trade in services. In 2023, the total value of trade in services between the two countries was 1.1 billion EUR, increasing 10.2% from 2022. Of this amount, it was Dutch service exports to Thailand of 673 million EUR against imports of 420 million EUR.
In the first quarter of 2024, the bilateral trade in services was 279 million EUR, declining 9.7% from 309 million EUR recorded in the same period of 2023. The Netherlands exported 160 million EUR of services to Thailand , dropping 18.4% compared to the first quarter of 2023. On the other hand, the Netherlands imported 129 million EUR of services from Thailand, increasing 14.2%.
The decline in Dutch service exports to Thailand was mainly from: technical, trade related services; and professional and management consulting services (though they remained the key exports to Thailand); as well as transport services. Other principal Dutch service exports to Thailand were: charges for the use of intellectual property; travel; and telecommunications.
As for the main Dutch service imports from Thailand, they were: (personal) travel; technical, trade related services; professional and management consulting services; and transport services.
Investment
According to the Bank of Thailand’s statistics, the Netherlands is the biggest EU source of foreign direct investment in Thailand, and has recently become no. 4 globally (following Japan, Singapore, and Hong Kong). As at the end of the first quarter of 2024, cumulative direct investment from the Netherlands to Thailand was 19.0 billion USD (approx.17.1 billion EUR), accounting for 6.6% of total foreign direct investment in Thailand and 54.1% from the EU.
The Netherlands is also the largest EU destination for Thai Direct Investment (TDI) overseas and no. 3 globally, after Hong Kong and Singapore. As at the end of the first quarter of 2024, accumulated TDI in the Netherlands was 23.4 billion USD (approx.21.1 billion EUR), representing 11.5% of total TDI abroad and 77.7% to the EU.