BANGKOK- Thailand’s government will push for 3.5 percent economic growth this year and will seek to work closer with the central bank to support small businesses, Prime Minister Paetongtarn Shinawatra said on Tuesday.
Commercial banks are profitable but lending to small businesses remains low, Paetongtarn said, adding that boosting credit access for small and medium enterprises would help the economy.
The government would hold discussions with the central bank to address the issue, she said.
Paetongtarn’s comments come after Thailand’s fourth quarter gross domestic product growth missed forecasts, expanding 3.2 percent.
The figure was short of the 3.9 percent growth expected in a Reuters poll but was still the strongest annual rate in nine quarters.
“The economy grew in almost all dimensions in the fourth quarter, but private investment contracted,” Paetongtarn said, adding more investment was being encouraged.
Southeast Asia’s second-largest economy has lagged regional peers as it struggles under high household debt and borrowing costs, and sluggish demand from China, which is also a key tourism market.
“The government’s (growth) forecast is 3.0 percent, we are pushing to 3.5 percent,” she said. “We can reach that goal and in the remaining months we will push.”
On a quarterly basis, the economy grew a seasonally adjusted 0.4 percent in the October-December quarter, below the poll forecast of 0.7 percent growth and the 1.2 percent expansion in the prior quarter.
Full-year growth came in at 2.5 percent, the NESDC said, faster than 2.0 percent growth in 2023, while the growth forecast for this year was unchanged at a range of 2.3 percent to 3.3 percent.
NESDC head Danucha Pichayanan told a press conference that while government spending, private consumption and investment, tourism, and exports would support growth this year, Thailand’s trade surplus with the United States was a risk as President Donald Trump imposes tariffs on trading partners.
“It is undeniable that Thailand is also in the spotlight on this matter… and that requires urgent attention to address and find ways to negotiate to reduce the impact on Thai exports,” he said, as the agency upgraded its forecast for export growth this year to 3.5 percent from 2.6 percent.
Capital Economics said while economic growth has slowed, “we are expecting a better year ahead, with loose fiscal policy and further recovery in tourism spending set to be the key drivers”.
