Thailand: Economy to grow up to 3.5% this year, finance minister says

The economy is expected to grow 3% to 3.5% this year, with a slow but steady recovery as the crucial tourism sector picks up and exports remain good, Finance Minister Arkhom Termpittayapaisith told a business forum on Wednesday.

The number of foreign tourists should reach 8 million to 10 million this year as Covid-19 restrictions were eased, Mr Arkhom said at Bangkok Post Forum 2022, THAILAND READY: Moving onto the Next Chapter.

There were 428,000 visitors last year, when the economy expanded 1.5%, among the slowest in Southeast Asia. In 2019, there were nearly 40 million foreign tourists.

Thailand’s fiscal position remains stable, with public debt below its approved ceiling, he said.

The country’s ratio of public debt to the GDP was 60.75% in July, which was still lower than the ceiling of 70%, he said.

The finance minister said the government’s revenue collection in the 2022 fiscal year is expected to exceed the target. In recent months, the collected revenue was spent to ease people’s burden from rising energy prices.

The finance and energy ministries are jointly considering other tax measures to mitigate the impact of high energy prices in the next couple of months, but the measures will be targeting vulnerable groups, Mr Arkhom said.

Inflation hovered near a 14-year high of 7.61% in July, far above the central bank’s target range of 1% to 3%.

Inflation should peak in the third quarter. for about an average 6% for the whole of 2022, the minister said.

The Bank of Thailand is expected to raise its key interest rate again at its next meeting on Sept 28 after lifting it this month for the first time in nearly four years, to contain inflation. 

The government’s expenditure budget of 3.18 trillion baht for the 2023 fiscal year will play an important role in reviving the economy, he added.