(BANGKOK) Thailand’s economy outperformed expectations in the first quarter, according to official data released on Monday (May 15). The country witnessed a boost in economic growth, driven by a resurgence in private consumption and a recovery in tourism, which is expected to counterbalance the decline in exports.
Thailand, heavily reliant on tourism, experienced a slower recovery compared to its regional counterparts due to the impact of the COVID-19 pandemic. However, the situation improved in recent months as Chinese visitors returned, contributing to increased employment opportunities and domestic demand. The revival of the tourism sector is anticipated to mitigate the adverse effects of diminishing exports.
The country’s state planning agency reasserted its economic growth projections for 2023, as Thailand awaits the formation of a new government following a remarkable election victory by the opposition on Sunday.
Data from the National Economic and Social Development Council (NESDC) revealed that Southeast Asia’s second-largest economy expanded by 2.7 percent year-on-year in the January-March period. On a quarterly basis, the gross domestic product (GDP) demonstrated a seasonally adjusted growth of 1.9 percent in the March quarter, surpassing the anticipated rise of 1.7 percent. This positive performance follows a 1.1 percent contraction in the fourth quarter of 2022, which was revised from a 1.5 percent decline.
Economists surveyed by Reuters had projected a 2.3 percent year-on-year expansion in GDP for the January-March period, following a 1.4 percent growth in the previous three months.
The NESDC maintained its GDP growth forecast for 2023, expecting it to range between 2.7 percent and 3.7 percent. Thailand’s economy grew by 2.6 percent in the previous year.
The agency also kept its forecast of 28 million foreign tourist arrivals for 2023. Typically contributing to 11 to 12 percent of GDP, tourism played a significant role in Thailand’s economy. The country exceeded its tourism target in 2022 with 11.15 million foreign visitors. In 2019, before the pandemic, Thailand attracted a record-breaking nearly 40 million foreign tourists, who spent a total of 1.91 trillion baht (US$56 billion).
Additionally, the NESDC maintained its predictions of a 1.6 percent drop in goods exports and headline inflation ranging between 2.5 percent and 3.5 percent for 2023.
