18-8-2023 (BANGKOK) Thailand’s economy is expected to have grown 3.1% in the second quarter of this year compared to the same period last year, according to a Reuters poll of 21 economists. This figure represents an improvement from the 2.7% growth recorded in the previous quarter. The growth is primarily attributed to an increase in foreign tourist arrivals, signaling a gradual recovery for the country’s tourism-driven economy.
On a quarterly basis, the gross domestic product (GDP) is forecast to have expanded by a seasonally-adjusted 1.2%. Although this indicates a slight slowdown from the 1.9% growth in the preceding quarter, it still reflects positive momentum for the Thai economy.
Despite the positive growth, Thailand’s tourism sector is still facing challenges as visitor numbers remain significantly below pre-pandemic levels. It is estimated that the country will receive 29 million tourists this year, a substantial decrease from the 40 million visitors recorded in 2019, which was the last full year before the onset of the COVID-19 pandemic.
Exports, which have historically been a crucial driver of Thailand’s economic growth, have been contracting since October 2022. This decline suggests weak global demand, particularly from China, Thailand’s largest trading partner.
Chua Han Teng, an economist at DBS, noted that the ongoing recovery in foreign tourism, including the return of visitors from China, along with resilient private consumption, has supported the country’s economic expansion. However, the decrease in merchandise exports has limited the overall growth potential, preventing a more substantial improvement in the second quarter of 2023 due to the challenging global economic environment.
A separate Reuters poll indicates that economic growth in Thailand is expected to average 3.7% this year, in line with the Bank of Thailand’s estimate. Looking ahead to 2024, economists forecast a slight increase to 3.8% growth, indicating cautious optimism for the country’s economic recovery in the coming years.
