Finance Ministry Cuts 2024 Growth Outlook Amid Tug-Of-War Between Gov't & Central Bank

Thailand's Finance Ministry cut its GDP growth forecast for this year to +2.8% Y/Y from October's estimate of +3.2% pointing to a "slump in manufacturing and export sector," which "have really hurt the country's economic recovery". Head of the Fiscal Policy Office (FPO) added that "the economic slowdown in China will further affect the country's exports and tourism growth for 2024".

• The 2023 growth forecast was also revised lower to +1.8% Y/Y from the previous estimate of +2.7%. The revisions to the 2023 and 2024 growth forecasts were flagged by government spokesman Chai Wacharonke yesterday.
• This comes amid a public dispute between the government and the central bank over the optimal monetary policy trajectory. PM Srettha today pledged more stimulus arguing that "the economy is not doing well and is in crisis," adding that it was fine if the BoT Governor disagreed with him.
• Governor Sethaput noted on Tuesday that such measures would not alleviate structural issues haunting the Thai economy. He also dismissed the assessment that the economy is "in crisis" despite slower economic growth and showed no intention to reconsider cutting rates amid pressure from Srettha.
• The Finance Ministry also lowered its estimate of headline inflation for this year to +1.0% Y/Y, which is the lower end of the BoT's target band.