27-7-2023 (BANGKOK) The Fiscal Policy Office (FPO) has adjusted its economic growth forecast for Thailand this year, lowering it to 3.5% from the previous estimate of 3.6%. The revision was attributed to a decline in international tourism revenues and a slowdown in exports, according to director-general Pornchai Thiraveja.
During a press conference on the Thai economic outlook for 2023, Mr. Pornchai revealed that the economy is now projected to expand by 3.5%, with the revision made primarily due to lower estimated revenue from foreign tourists.
The projected revenue from foreign tourists for this year is expected to be 1.25 trillion baht, down from the initial forecast of 1.3 trillion baht in April. The decline is attributed to reduced spending per trip per tourist, particularly from Malaysian visitors in comparison to Chinese travelers.
As of June, Thailand has welcomed 12.9 million foreign tourists, aiming for an annual target of 29.5 million.
Regarding the country’s export value in 2023, the forecast indicates a contraction of 0.8% for this year, compared to an estimated 0.5% contraction in April. The economic slowdown among Thailand’s 15 key trading partners is a contributing factor, with their expected expansion at 2.8%, compared to 3.4% last year.
Additionally, the delay of the budget for 2024 by up to six months is expected to impact the country’s GDP this year by 0.05%, as mentioned by Mr. Pornchai.
However, in the case that the 2024 Budget Expenditure Act cannot be implemented in time for the start of the 2024 fiscal year on Oct 1, the previous year’s expenditure budget, including the accrued investment expenditure of 150 billion baht, might be utilized temporarily, with disbursement not exceeding 1.3 billion baht in fiscal 2024.
Furthermore, revolving funds could be allocated to support vulnerable groups in the country, particularly farmers affected by the El Niño phenomenon, which could contribute to an increase in the circulation of money.
Mr. Pornchai emphasized that an influx of Chinese tourists in the second half of this year could potentially boost the economy, as outbound Chinese travelers have shown renewed momentum, evident in the rise in the number and frequency of flights between China and Thailand.
Regarding oil prices, the Dubai crude oil price is projected to be at US$79 per barrel, down from last year’s average of $95.4, largely influenced by China’s deflation and global economic uncertainties.
