Thailand’s economic growth quickens in Q1 as tourism rebounds

THAILAND’S economy expanded faster than expected in the first quarter, official data showed on Monday (May 15), helped by a rebound in private consumption and tourism.

The tourism-reliant economy’s recovery has lagged its regional peers due to Covid-19, but gathered steam as Chinese visitors returned in recent months helping boost employment and domestic demand. The revival of the sector is expected to help offset the impact from declining exports.

Thailand’s state planning agency reiterated its economic growth outlook for 2023, as the country waits for the formation of a new government after the opposition secured a stunning election victory on Sunday.

South-east Asia’s second-largest economy grew 2.7 per cent in the January-March period from a year earlier, data from the National Economic and Social Development Council (NESDC) showed.

On a quarterly basis, GDP rose a seasonally adjusted 1.9 per cent in the March quarter, versus a forecast of 1.7 per cent.

That compared with a 1.1 per cent contraction in the fourth quarter of 2022, which was revised from a 1.5 per cent drop.

Economists in a Reuters poll had expected gross domestic product (GDP) to expand 2.3 per cent year-on-year in January-March after increasing 1.4 per cent in the previous three months.

The NESDC kept its 2023 GDP growth forecast unchanged at between 2.7 per cent and 3.7 per cent. Last year’s growth was 2.6 per cent.

It also kept its forecast for 2023 foreign tourist arrivals at 28 million. Tourism typically accounts for 11-12 per cent of GDP.

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Thailand beat its tourism target in 2022 with 11.15 million foreign visitors. Pre-pandemic 2019 saw a record of nearly 40 million foreign tourists, who spent 1.91 trillion baht (S$75 billion).

The NESDC also kept its 2023 forecasts for goods exports to drop 1.6 per cent and headline inflation to be between 2.5 per cent and 3.5 per cent. REUTERS