Tourists visit Maya Bay after Thailand reopened its world-famous beach after more than three years of closure. Picture taken January 3, 2022. REUTERS/Athit Perawongmetha
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- Thailand’s GDP grew 3.1% yoy in the second quarter versus 2.2% in the first quarter
- Q2 GDP seen at 0.9% q/q sa versus +1.1% in Q1
- Q2 GDP data due Monday 15 August
BENGALURU, Aug 12 (Reuters) – Thailand’s economy is likely to have grown at its fastest rate in a year in the last quarter thanks to increased tourism, but the high cost of living and a slowdown in China pose a threat to the outlook, a Reuters poll showed.
Growth in the tourism-dependent economy is estimated at 3.1% yoy in the second quarter, according to the median forecast of 16 economists polled between Aug. 8-11, versus 2.2% growth in the previous quarter.
On a quarterly basis, however, gross domestic product (GDP) grew a seasonally adjusted 0.9%, slowing slightly from 1.1% in the previous quarter, the median forecast from a smaller sample of 12 economists showed.
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Forecasts ranged between 0.1% and 1.3%, highlighting the uncertainties surrounding the recovery of Southeast Asia’s second largest economy from the pandemic. The data is scheduled to be released on August 15.
“Thailand’s crucial tourism sector is a significant part of the economy and a faster-than-expected revival should boost overall growth,” said Chua Han Teng, economist at DBS.
“However, the tourism sector’s heavy reliance on Chinese tourists suggests that a full recovery to pre-pandemic numbers may be some time away unless China relaxes its zero-COVID policy.”
Thailand received 1.07 million foreign tourists in July, up from 767,497 in the previous month.
The government estimates that the number of foreign tourists will reach 10 million this year. Prime Minister Prayut Chan-ocha said the economy is expected to grow 3.3% this year and 4.2% next year, helped by increasing tourism. Continue reading
But an ongoing COVID-19 situation in China, which is still pursuing a zero-COVID strategy, has fueled fears of a delay in Chinese tourists returning. This, coupled with a slowdown in the world’s second largest economy, increases the risk of a deep global recession. Continue reading
“Elevated fears of a global recession amid an uncertain environment could weigh on the Thai economy and pose downside risk to our growth forecast,” added DBS’s Han Teng.
A separate Reuters poll showed Thailand’s economy would grow 3.4% this year and then accelerate to 4.1% in 2023 before slowing to 3.5% in 2024.
But inflation remains a problem. The policy rate fell to 7.61% in July, but was still close to June’s 14-year high and well above the Bank of Thailand’s (BOT) 1%-3% target range.
“There is no clear indication that inflation is going to come down significantly or fall significantly,” said Tim Leelahaphan, economist at Standard Chartered.
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Reporting by Anant Chandak; Survey by Devayani Sathyan; Edited by Hari Kishan and David Holmes
Our standards: The Thomson Reuters Trust Principles.
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