Thailand’s tourism-dependent economy is likely to gain momentum in Q2

Tourists visit Maya Bay after Thailand reopened the world-famous beach after it was closed for more than three years. Taken January 3, 2022. REUTERS/Athit Perawongmetha

BANGALORE (Reuters) – Thailand’s economy likely grew at its fastest pace in a year in the last quarter, thanks to an increase in tourism as pandemic restrictions eased, but soaring costs of living A slowdown in China threatens the outlook, Reuters said. A poll showed.

A survey of 16 economists conducted August 8-11 estimated that the tourism-dependent economy grew 3.1% year-on-year in the second quarter, up from 2.2% in the previous quarter. % growth rate.

On a quarterly basis, however, gross domestic product (GDP) increased by 0.9% on a seasonally adjusted basis, slowing slightly from 1.1% in the previous quarter, above the median forecast from a small sample of 12 economists. indicated by

Forecasts range from 0.1% to 1.3%, highlighting the uncertainty surrounding Southeast Asia’s second largest economy’s recovery from the pandemic. The data will be released on August 15th.

“Thailand’s important tourism sector is an important part of the economy, and a faster-than-expected recovery should boost overall growth,” DBS economist Chua Han Teng said.

“However, the tourism sector’s heavy reliance on Chinese tourists means that it will take a considerable amount of time to fully recover to pre-pandemic numbers if China does not ease its zero-COVID policy. suggesting.”

Thailand received 1.07 million foreign tourists in July, up from 767,497 the previous month.

The government estimates that foreign tourist arrivals will reach 10 million this year. Prime Minister Prayut Chan-ocha said he expects economic growth to be 3.3% this year and 4.2% next year, fueled by an increase in tourism.read more

However, the ongoing COVID-19 situation in China, which is still pursuing a zero COVID strategy, has fueled concerns that the return of Chinese tourists will be delayed. That raises the risk of a deep global recession, with a slowdown in the world’s second-largest economy.read more

“Increasing global recession fears in an uncertain environment could drag down the Thai economy and pose downside risks to our growth forecasts,” DBS’ Han Teng said. added.

Another Reuters poll showed Thailand’s economy will grow 3.4% this year, accelerating to 4.1% in 2023 and slowing to 3.5% in 2024.

However, inflation remains a concern. Composite interest rates fell to 7.61% in July, but were still near his 14-year high in June and below the Bank of Thailand’s (BOT) target range of 1% to 3%. greatly surpassed.

“There’s no clear indication that inflation will drop significantly or that it will drop significantly,” said Tim Leelahaphan, an economist at Standard Chartered.

Reported by Anant Chandak. Poll by Devayani Sathyan.Edited by Hari Kishan and David Holmes

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