Thailand
Thailand: Tourism, consumption lead GDP growth
The economy is on course for continuous recovery driven by increasing tourism activities and active private consumption, with the growth rate expected to return to pre-Covid level by the end of this year or beginning of 2023, according to Anucha Burapachaisri, the government spokesman.
He cited forecasts by the International Monetary Fund (IMF) and the Bank of Thailand.
In its latest world economic report, the IMF left its 2022 prediction unchanged at 3.2%, but expects a meagre 2.7% global growth rate next year, down from the 2.9% it projected in July.
Meanwhile, the IMF forecast the Thai economy to continue its post-pandemic recovery with an expansion of 2.8% this year and 3.7% in 2023 compared with 1.5% growth in 2021, against a 6.2% contraction in 2020.
The IMF forecast of 2.8% GDP growth in 2022 has been unchanged since July.
Private consumption and tourist arrivals are expected to remain strong for the rest of the year, although external demand is projected to weaken, according to the IMF.
Mr Anucha cited the IMF’s report that economic prospects still rely heavily on foreign tourists’ return. The agency also warned that rising energy prices may affect private consumption and reduce external demand for exports.
In addition, Thailand is facing growing challenges such as tightened global financial liquidity, a rapidly slowing Chinese economy and expanded private balance sheets which may halt the country’s economic recovery.
Mr Anucha also cited the Bank of Thailand’s forecast that the economy is likely to expand continually by 3.3% in 2022 and 3.8% in 2023, respectively, propelled largely by the recovering tourism sector and private consumption.
The tourism sector is expected to recover at a faster pace due to the continuous increase in foreign tourist arrivals. More importantly, the service sector and people’s and businesses’ income are also expected to improve accordingly.
Despite a more-than-expected global economic slowdown which might affect the country’s export sector, Thailand’s overall economic prospects remain strong.
Thailand’s financial system is also still stable, with commercial banks maintaining relatively strong capital fund and reserves, while the debt serviceability of businesses and households is improving in line with the country’s economic recovery.
Small and medium-sized enterprises in some business sectors have also found to have recovered slowly. However, some low-income households are still sensitive to rising living costs, he said, adding debt restructuring measures are still needed for troubled businesses.
It is also expected that the economy will return to the level before the pandemic by the end of this year or early next year which is a good sign to drive all sectors in line with the improving economic situation, said Mr Anucha.
“The IMF and central bank forecasts reflect that the Thai economic prospects remain established. Risks incurred from the volatility of the world economy remain at a manageable level,” he said. “Prime Minister Prayut Chan-o-cha has ordered all related agencies to prepare and implement measures to support the economic recovery, with financial assistance covering all groups of vulnerable people such as soft loans and sustainable debt restructuring measures.”
Source: https://www.bangkokpost.com/business/2416555/tourism-consumption-lead-gdp-growth