BANGKOK- Thailand’s economy expanded faster than expected in the first quarter due to a recovery in tourism, data showed on Monday, while investors braced for political uncertainty after the opposition secured a stunning election victory on Sunday.
The tourism-reliant economy’s recovery has lagged its regional peers due to COVID-19, but gathered steam in recent months as Chinese visitors returned. The revival of the sector, which accounts for 11-12 percent of its gross domestic product (GDP), is expected to help offset the impact from declining exports.
Thailand’s state planning agency reiterated its outlook for a 2.7 percent-3.7 percent GDP growth in 2023, versus 2.6 percent last year, saying the post-election atmosphere should be kept positive to build investor confidence.
Southeast Asia’s second-largest economy grew 2.7 percent in the January-March period from a year earlier, versus a 1.4 percent growth in the previous quarter, data from the National Economic and Social Development Council (NESDC) showed.
On a quarterly basis, GDP rose a seasonally adjusted 1.9 percent, from a revised 1.1 percent contraction in the fourth quarter of 2022.
Economists in a Reuters poll had expected GDP to expand 2.3 percent year-on-year in January-March and 1.7 percent quarter-on-quarter.
The data, however, failed to lift the stock market that dropped as much as 1.3 percent in early trade due to concerns over political uncertainty and policy pledges after the election.
The baht pared earlier gains.
Thailand’s political heavyweights were set for an intense round of deal-making on Monday after the election that delivered big gains for the opposition over parties allied to the military but with no clear indication of alliances taking shape.
“What needs to be done as quickly as possible is the formation of a stable government that will quickly continue policies that support businesses and the people,” said Chaichan Chareonsuk, chairman of the Thai National Shippers’ Council.
Several analysts echoed the view, saying investors were likely to stay on the sidelines as they wait for a new government and clarity on its policies. -Reuters
