Thailand’s economy showed signs of recovery as its GDP growth increased to 2.7% y/y in Q1 2023, up from 1.4% in Q4 2022, with contributions from private consumption, fixed investment, and exports, all of which surpassed expectations. However, private credit growth has slowed in recent months, raising concerns about domestic demand. Despite the ongoing global manufacturing downturn, the tourism industry’s continued recovery has brightened Thailand’s external outlook. Overall, the growth forecasts for 2023 and 2024 are above-consensus at 3.8% and 4.5%, respectively. Nevertheless, the growing risks to medium-term investment pose a downside risk to this outlook. Consequently, there is a need for new impetus to drive above-trend growth.