Thai economy to grow 3% this year, 3.7% next year – state agency

Thailand’s economy is expected to grow by 3% this year and 3.7% next year, driven by exports, increased domestic demand and a recovery in tourism, the state planning agency said on Wednesday.

Exports, a key driver of growth, still had momentum despite the impact of Russia’s invasion of Ukraine on the global economy, Danucha Pichayanan, head of the National Economic and Social Development Council (NESDC), told a business seminar.

“The Russia-Ukraine issue is a risk but it’s also an opportunity, such as for food (exports),” Mr Danucha said.

Southeast Asia’s second-largest economy will also be helped by the vital tourism sector that is expected to see 7 million to 10 million foreign tourist arrivals this year, he said.

That compared with about 428,000 foreign tourists last year and nearly 40 million in pre-pandemic 2019.

Despite inflation hitting the highest in more than 14 years at 7.1% in May, manufacturers have not passed costs to consumers that much, said the NESDC official.

Government price control on essential goods and various measures to cope with surging oil prices have helped slow prices.

Separately, Fitch Ratings expects the Thai economy to grow 3.2% this year and 4.5% next year, with foreign tourist arrivals seen at 6.5 million and 22 million, respectively.

Tourism inflows will also help support a weakening baht , Jeremy Zook, a director at Fitch Ratings, told a webinar. The Thai currency was trading at its weakest level in more than five years against the US dollar.