Data released on Monday (15 May) showed Thailand’s economy expanded faster than expected in the first quarter due to a recovery in tourism, even as investors brace for political uncertainty after Sunday’s elections.
The nation’s economic recovery gathered steam in recent months as Chinese visitors returned. The revival of the sector, which accounts for 11-12% of its gross domestic product (GDP), is expected to help offset the impact from declining exports.
Thailand’s state planning agency reiterated its outlook for a 2.7%-3.7% GDP growth in 2023, versus 2.6% last year, saying the post-election atmosphere should be kept positive to build investor confidence.
Data from the National Economic and Social Development Council (NESDC) indicated that Southeast Asia’s second-largest economy grew 2.7% in the January-March period from a year earlier, versus a 1.4% growth in the previous quarter.
On a quarterly basis, GDP rose a seasonally adjusted 1.9% from a revised 1.1% contraction in the fourth quarter of 2022. Economists in a Reuters poll had expected GDP to expand 2.3% year-on-year in January-March and 1.7% quarter-on-quarter.
Thailand’s political heavyweights were set for an intense round of deal-making on Monday after the election that delivered major gains for opposition parties, but with no clear indication of alliances taking shape. Several analysts echoed the view, saying investors were likely to stay on the sidelines as they wait for a new government and clarity on its policies.
Meanwhile, the NESDC maintained its forecast for 2023 foreign tourist arrivals in Thailand at 28 million.
The country beat its tourism target in 2022 with 11.15 million visitors. Pre-pandemic 2019 saw a record of nearly 40 million foreign tourists, who spent 1.91 trillion baht (US$56 billion).
The NESDC also kept its 2023 forecasts for goods exports to drop 1.6% and headline inflation to be between 2.5% and 3.5%. (NNT)
