Tourism rebound aiding Thailand’s economic recovery

A REVIVAL in tourism helped Thailand expand at the fastest pace in more than a year last quarter, even as finer details of the economic data support the case for the central bank to go slow on monetary policy tightening.

Gross domestic product (GDP) rose 4.5 per cent in July-September from a year ago, the National Economic and Social Development Council said on Monday (Nov 21), matching the median estimate in a Bloomberg survey. Compared with the previous three months, output expanded 1.2 per cent, beating expectations for a 0.8 per cent increase.

That performance lifts expansion in the first nine months of the year to 3.1 per cent — a pace that will see Thailand trailing neighbours in South-east Asia. Its position as a regional laggard in GDP expansion will likely goad the Bank of Thailand to stick with its gradual approach to raising interest rates to tame inflation.

Government spending and investment decreased during the quarter, while private consumption increased. Goods, services exports growth quickened 9.5 per cent year on year, compared with 8.5 per cent in the previous quarter, data showed.

The baht weakened 0.5 per cent to 36.02 per US dollar as at 10.15 am in Bangkok. The currency, which has fallen more than 6 per cent against the US dollar so far this year, is supporting post-pandemic tourism recovery.

The cheaper baht is adding to the appeal of the country as a value for money destination.

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Overseas tourism makes up some 12 per cent of the economy, while the travel sector as a whole accounts for a fifth of jobs. Arrivals totalled 7.56 million as at Oct 30, with at least 1.5 million visitors a month expected during the remainder of the year, according to the government.

The economy is seen expanding 3 per cent to 4 per cent next year, compared with a growth rate of 3.2 per cent this year, with the nation expected to swing back into a current account surplus of 1.1 per cent of GDP from an estimated shortfall of 3.6 per cent this year, the council said.

Revenue from foreign tourist arrivals may jump to 1.2 trillion baht (S$46 billion) in 2023 from about 0.57 trillion baht this year, the council said, while forecasting overseas arrivals to jump to 23.5 million from 10.2 million seen this year. BLOOMBERG