Thailand cuts GDP growth outlook as exports weaken

• Apr 26, 2023

THAILAND’S finance ministry has lowered its 2023 economic growth outlook to 3.6 per cent from 3.8 per cent projected earlier, on expectations of a fall in exports as global demand weakens, officials said on Tuesday (Apr 25).

Exports, a key driver of Thai growth, are expected to drop 0.5 per cent this year, compared with a previous forecast for a 0.4 per cent rise, Pornchai Thiraveja, head of the ministry’s fiscal policy office, told a briefing.

“A global slowdown is a drag on Thailand’s economic growth… and exports might not increase as thought,” he said.

Public consumption is expected to fall 2.1 per cent this year due to an expected delay in Thailand’s 2024 fiscal budget as the country holds an election on May 14, Pornchai said.

However, growth in South-east Asia’s second-largest economy, is expected to be propped up by tourism and domestic consumption, he said.

The economy expanded 2.6 per cent last year and the recovery has lagged that of other South-east Asian nations, with tourism just starting to rebound last year with 11.15 million foreign arrivals.

Thailand is expected to receive 29.5 million foreign tourist arrivals this year, with the return of Chinese visitors, versus 27.5 million projected earlier, Pornchai said.

Pre-pandemic 2019 saw a record of nearly 40 million foreign tourists, who spent 1.91 trillion baht (US$55.62 billion). Tourism accounted for about 12 per cent of gross domestic product (GDP).

The baht is expected to average 33.17 per US dollar this year versus a previous forecast of 32.5, with the US dollar supported by US rate hikes, fiscal policy advisor Wuttipong Jittungsakul said.

The ministry predicted average headline inflation at 2.6 per cent this year, down from 2.8 per cent projected earlier, and against a 24-year high of 6.08 per cent last year. REUTERS