Foreign tourist arrival gives boost to Thai economy in Q2

Monday, August 21, 2023

According to the median forecast of 21 economists surveyed by Reuters, Thailand’s GDP grew 3.1% in the April-June quarter compared to a year earlier, up from 2.7% in the prior quarter and driven by an increase in foreign tourist arrivals.

A smaller sample of projections in the Aug. 14–17 survey indicated that the gross domestic product (GDP) was expected to have expanded by a seasonally-adjusted 1.2% on a quarterly basis, which was slower than the 1.9% growth in the quarter before.

Although the tourism-based economy of the nation is anticipated to gradually revive, tourist numbers are still significantly below pre-pandemic levels. 29 million tourists are expected to visit Thailand this year, down from 40 million in 2019, the last full year prior to the COVID outbreak.

Since October 2022, exports, a major factor in growth, have decreased, a sign of sluggish global demand, particularly from China, Thailand’s largest trade partner.

“The ongoing foreign tourism recovery amid returning visitors including from China, and resilient private consumption underpinned the economic expansion,” wrote Chua Han Teng, economist at DBS.

“Yet, the drop in merchandise exports, while stabilising, continued to drag headline growth, and prevented a stronger growth improvement in 2Q23, given the challenging global economic environment.”

According to a second Reuters survey, growth was predicted to average 3.7% this year, in line with the Bank of Thailand’s prediction, and 3.8% in 2024.

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