Kasikorn Research Center (K-Research) predicts GDP growth of 3.1% next year, with expansion of 3.6% possible if the 10,000-baht digital wallet handout is implemented.
The growth outlook is attributed to public investment and private consumption, as well as projected growth in merchandise exports of 2%.
Foreign tourist arrivals are predicted to rise to 30.6 million, up from 27.6 million in 2023.
However, revenue from foreign travellers is expected to make up only half of total tourism revenue.
"It will take some time for foreign tourism income to return to the same level as 2019," said Burin Adulwattana, managing director of K-Research.
"If the government's digital wallet scheme is successfully launched, the economy is expected to grow by 3.6% in 2024. The economy will also depend on the central bank's policy rate for next year."
If the digital wallet handout is not implemented next year, economic growth is projected at 3.1% in 2024.
In this scenario, the research house predicts the Bank of Thailand would cut the policy rate in the second half of next year.
However, if GDP grows 3.6% next year, the central bank would maintain its policy rate at 2.5%, according to K-Research.
The research unit forecasts the European Central Bank would be the first among the major central banks to cut the policy rate next year, a move that would lead the US Federal Reserve to cut its policy rate in the first half of 2024.
Mr Burin said the Thai economy has expanded at a slower pace, below its potential level following the pandemic.
The potential rate should be 115% of the 2019 level, but it remains at 102%. Vietnam, for example, has an economic expansion of 117% of the 2019 level.
In addition, K-Research slashed its growth forecast for 2023 to 2.5% from an earlier projection of 3%.
The downgrade was attributed to the impact of the global economic slowdown, especially the faltering Chinese economy amid property woes.
China's downturn may also affect the foreign arrival tally, he said.
Moreover, domestic demand could be dampened if the tourism recovery is tepid while the manufacturing sector sags amid hefty household debt, according to K-Research.
Car sales contracted for several consecutive months and core inflation remains below the Bank of Thailand's target, noted the research house.
