BANGKOK- Thailand’s economy continued to recover in May as tourism gathered momentum and private and public spending increased while exports remained weak, the central bank said on Friday.
Economic activity was seen rising steadily with tourist arrivals still increasing, said Sakkapop Panyanukul, a senior director at the Bank of Thailand (BOT).
“The economic recovery remained on its recovery track,” he told a briefing. “Economic activity in June and going forward should gradually improve,” he added.
The BOT expects economic growth at 3.6 percent this year and 3.8 percent next year, with the vital tourism sector a key driver. Last year’s growth was 2.6 percent.
The BOT projects the number of tourist arrivals at 29 million this year and 35.5 million in 2024. That compared with a record of nearly 40 million visitors in pre-pandemic 2019.
Exports, however, contracted for the eighth month in a row in May, down 5.9 percent from a year earlier, as global demand slowed.
Annual exports are expected to remain negative until at least the third quarter but monthly figures saw some improvement, Sakkapop said.
In May, Thailand recorded a current account deficit of $2.8 billion, compared to a revised deficit of $0.6 billion the previous month, the BOT said.
Southeast Asia’s second-largest economy expanded by a better-than-expected 2.7 percent in the first quarter from a year earlier as the tourism sector gathered strength.
Global financial market volatility, as well as the formation of a new government and its policies, would be monitored going forward, Sakkapop said.
Thailand is in the process of forming a new government after May’s election, but doubts linger over whether the leader of the winning Move Forward party has enough Thai Senate support to become prime minister.
Thailand’s economy is projected to grow 3.9 percent this year, up from a previous forecast of 3.6 percent, helped by private consumption growth and a recovery in tourism, the World Bank said.
Thailand expanded 2.6 percent in 2022, when its tourism sector began to rebound after broad pandemic-related travel curbs were eased.
Growth is expected at 3.6 percent in 2024 and 3.4 percent in 2025, with tourism and private consumption remaining the primary drivers of growth as external demand weakens, the bank said in a statement.
The return of tourists, particularly from China, has strengthened the tourism outlook.
Arrivals are projected to reach a greater-than-expected 28.5 million this year, 84 percent of the pre-pandemic 2019 level, it said.
However, downside risks remain as weaker-than-expected global growth and political uncertainty pose key challenges to the near-term growth outlook, the bank said. -Reuters
