Thailand economy likely picked up speed in Q1 as tourism rebounds

By Reuters   May 11, 2023 | 11:16 pm PT
Thailand economy likely picked up speed in Q1 as tourism rebounds
People are seen at an empty beach in Phuket, Thailand, March 31, 2021. Photo by Reuters
Thailand's economy likely picked up speed in the first quarter aided by a strong recovery in the tourism sector and a rebound in private consumption, but a weakening global economy poses the biggest risk to the outlook, a Reuters poll found.

The tourism-reliant economy's recovery has lagged its regional peers due to the COVID-19 pandemic, but turned a corner with the return of Chinese tourists in recent months boosting employment and domestic demand.

Thailand's economy grew 2.3% in the January-March quarter from a year ago, up from 1.4% growth in the prior quarter, according to the median forecast of 20 economists polled May 8-11.

On a quarterly basis, gross domestic product (GDP) was forecast to have grown a seasonally-adjusted 1.7%, after contracting 1.5% in the previous quarter, the survey showed.

Forecasts ranged from 0.4% to 2.3% for the data due to be released on May 15.

"Growth was mainly driven by the ongoing recovery in foreign tourism as Chinese visitors began to make a comeback following China's reopening, as well as private consumption boost," noted Han Teng Chua, economist at DBS.

"That said, given the still-challenging global external goods trade was likely a drag to headline growth in 1Q23, even though to a smaller extent than in 4Q22."

Thailand beat its target of 6 million tourist arrivals in the first quarter, recording 6.15 million visitors between January and late March, government data showed.

A sharp fall in inflation from a 14-year peak of 7.86% in August last year to 2.67% last month has also helped boost consumer spending.

Growth was expected to average 3.7% this year, slightly above the Bank of Thailand's (BOT) estimate of 3.6%. It was then forecast to rise to 3.8% in 2024, a separate Reuters poll showed.

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