Thailand’s economy on recovery path as tourism rises

Thailand’s economic recovery remained on track in June as the tourism sector expanded on higher foreign tourist arrivals while exports declined, the central bank said on Monday.

Economic activity was seen gradually improving, driven by tourism, as exports were not expected to improve until late in the year, said Chayawadee Chai-Anant, an assistant governor at the Bank of Thailand (BOT).

“In the period ahead, tourism should continue to recover and remain a key driver force, while exports are likely to be stable,” she told a briefing.

The BOT has forecast economic growth at 3.6% this year and 3.8% next year, driven by tourism. Last year’s growth was 2.6%.

It has predicted 29 million tourist arrivals this year and 35.5 million in 2024. That compared with nearly 40 million visitors in pre-pandemic 2019.

Chayawadee said the central bank was monitoring risks from a global economic slowdown and a delay in the formation of a new government after May national elections.

“The government formation, if delayed for a long time, would dent confidence,” she added.

Thailand’s parliament is scheduled to meet on Aug. 4 to try again to pick a prime minister as a political stalemate drags for more than two months after the election.

In June, exports, a key driver of growth, dropped 5.9% from a year earlier as global demand slowed.

Thailand recorded a current account surplus of $1.4 billion, after a deficit of $2.8 billion in May.

In the second quarter of 2023, Southeast Asia’s second-largest economy improved slightly from the previous period, the BOT said. Official second-quarter GDP data is due to be released on Aug. 21.

The economy expanded 2.7% on-year in the first quarter.
Source: Reuters