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Thai Economy Shows Resilience with a 3.1% Q2 Growth: How Tourism is Leading the Charge

Published: August 18, 2023 at 2:06 pm

thailand economy concept

Amid the evolving global economic landscape, Thailand’s economy demonstrates a promising sign of resilience. Reuters’ recent poll of 21 economists indicates a potential 3.1% growth in the nation’s economy for the second quarter, marking an increment from the preceding 2.7% during the January-March quarter. And what’s behind this surge? An increase in international tourists seems to be the driving force.

The Tourism Impact
Although the COVID-19 pandemic significantly impacted global travel, the data hints at a slow yet steady recovery. With the April – June 2023 quarter shining brighter than before, a significant factor is the revival of international tourism. The number, however, remains somewhat subdued compared to pre-pandemic years. In 2019, a staggering 40 million tourists graced Thailand, while the forecasts for this year suggest a figure of 29 million – indicating the journey ahead for a full-fledged tourism recovery.

DBS economist Chua Han Teng emphasizes the tourism revival’s essential role, noting the return of Chinese tourists and robust private consumption. “The resurgence of foreign tourism, particularly the influx of Chinese tourists, has buoyed the economy,” says Teng.

Other Economic Indicators
While tourism shows a promising path, examining other sectors is crucial. Notably, from October 2022, the export sector – Thailand’s primary growth engine – displays a deceleration. The reduction points towards a tepid global demand, with China, Thailand’s significant trading ally, reflecting a weaker import appetite.

This decline in merchandise exports puts a damper on the overall growth trajectory. As Teng explains, “Even with stabilization, the dip in exports poses a challenge, preventing the potential for even more robust growth in Q2 2023 due to the broader global economic environment.”

Thailand’s Economic Future
The projections suggest an average growth of 3.7% for 2023, with a slight uptick to 3.8% in 2024.

These figures underscore the resilience and potential of the Thai economy. While the global environment remains challenging, especially with the effects of the pandemic, Thailand remains on a path to recovery. And as it moves forward, the consistent increase in tourist numbers, combined with strategic national policies, can potentially usher Thailand into an era of robust economic growth.

SOURCE: Reuters

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