The resurgence of the tourism industry is predicted to be the key driver of Thai economic growth going forward, which should raise labor income and private consumption.
Thailand’s economy is predicted to expand 3.6% this year, according to Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput, who also said that fiscal and monetary policy should place stability over economic stimulus.
The BOT forecasted that the Thai economy is projected to continue rising, fueled mostly by recovery in the tourism industry, and boosted interest rates by a quarter point to 1.75% last month. Since August, the BOT has increased its benchmark rate by a total of 125 basis points.
Growth is anticipated to be between 3.6% and 3.8% between 2023 and 2024.
A number of variables contributed to the growth projections for 2023 and 2024, which were 3.6 and 3.8 percent, respectively.
First, the tourism industry has been recovering strongly, with an increase in international visitors coming from the majority of the source nations.The estimate of 25.5 million visitors in 2023 and 34 million visitors in 2024 was revised upward to 28 million and 35 million, respectively, for 2023 and 2024.
Second, increasing employment and labor income should encourage private spending, particularly for the service and self-employed sectors that benefited from the tourism revival.Third, following a decline in the final quarter of 2022, merchandise exports began to increase and should continue to do so throughout the second half of 2023, consistent with the expansion of trading partners.
However, some exports of goods, such as petrochemicals, which were impacted by China’s dual circulation strategy and electronics, whose global demand was experiencing a cyclical decline, may rebound more slowly than others. Overall, the likelihood that international tourists will visit Thailand and spend more than expected tilts the risk of economic growth there in favor. The Committee did, however, draw attention to the risks associated with the extremely ambiguous global financial and economic outlook.
