Farmers and retirees are likely to join the ranks of those categorised as in poverty next year because of low earnings, depressed farm prices and high household debt, says the World Bank.
Prices of oil and agricultural products are expected to continue to be low in 2019 because of a protracted global economic slowdown, said Kiatipong Ariyapruchaya, senior economist at the World Bank.
A continued decline in commodity prices will dent farmers' income and weaken their debt-servicing ability, Mr Kiatipong said.
Falling farm income will take a toll on private consumption and worsen household debt among farmers next year, he said.
Household debt could stay at the current threshold and climb slightly in the future, Mr Kiatipong said.
Thailand's household debt rose to 12.3 trillion baht, or 77.6% of GDP, in the year's second quarter, up from the first quarter's 12.1 trillion baht, according to Bank of Thailand data.
The elderly are expected to have limited payment ability, while some retirees receiving small salary portions from relatives working in the agricultural industry, Mr Kiatipong said.
This outlook has farmers and retirees suffering the most in 2019, which will affect private consumption and lower the economic growth target, he said.
While the wealth gap between the rich and poor is projected to increase slightly, and continue to be a major problem as the number of people living poverty rises, Mr Kiatipong said.
The World Bank projects Thailand's GDP growth will expand by 4% this year and next, with the main growth driver attributed to public investment related to the Eastern Economic Corridor investment projects linking with neighbouring countries.
Yunyong Thaicharoen, chief economist at Siam Commercial Bank's Economic Intelligence Centre, said Thailand's GDP growth is anticipated to expand by 3.9% next year, with a 4.3% growth in exports.
Key factors affecting Thailand's economic growth outlook next year are a fall in global demand and tourism, structural challenges derived from digital disruption in the real sector, a decline in global liquidity and fund flow volatility stemming from the Federal Reserve's interest rate normalisation as well as clear impacts from the global trade war, Mr Yunyong said.
"[Private] consumption is expected to slightly decrease due to the automation effect because companies will cut overtime work hours and replace some staff with robots and automation," he said. "Thailand's GDP growth has already peaked at around 4-5% earlier this year."
Don Nakornthab, senior director of the economic and policy department at the Bank of Thailand, said factors influencing the possible rise in the policy interest rate next year include GDP growth, inflation data and the impact of the monetary policy on the economy.
