Image: Reuters Berita 24 English - Thanks to greater travel as pandemic restrictions were relaxed, Thailand's economy probably expanded...
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| Image: Reuters |
Berita 24 English - Thanks to greater travel as pandemic restrictions were relaxed, Thailand's economy probably expanded at its quickest rate in a year last quarter. However, the forecast is threatened by rising living expenses and a slowdown in China, according to a Reuters poll.
According to the median prediction of 16 economists surveyed between August 8 and August 11, growth in the tourism-dependent sector is projected to increase to 3.1% year over year in the second quarter from 2.2% growth in the prior quarter.
On a quarterly basis, however, gross domestic product (GDP) growth slowed somewhat from 1.1% in the quarter before to 0.9%, according to a smaller sample of 12 economists' median predictions.
Forecasts ranged from 0.1% to 1.3%, underscoring the ambiguity surrounding the pandemic-related recovery of Southeast Asia's second-largest economy. On August 15, the statistics are scheduled for release.
According to Chua Han Teng, an economist at DBS, "Thailand's key tourist sector is a substantial portion of the economy and a faster-than-expected resurgence should increase total growth."
That being said, if China does not relax its zero-COVID policy, the tourism sector's heavy reliance on Chinese visitors means a full return to pre-pandemic numbers is still some time off.
In July, 1.07 million foreign visitors came to Thailand, an increase from 767,497 in June.
The number of international visitors is expected to hit 10 million this year, according to the government. According to the prime minister, Prayuth Chan-ocha, increasing tourism will help the GDP develop by 3.3% this year and 4.2% the following.
However, a continued COVID-19 scenario in China, which continues to pursue a zero-COVID strategy, has fueled worries that Chinese tourists' returns may be delayed. That raises the likelihood of a severe worldwide recession, along with a contraction in the second-largest economy in the world.
In a tumultuous environment, "heightened fears of a global recession could serve as a drag on Thailand's economy and provide negative risks to our growth prediction," Han Teng of DBS added.
According to a different Reuters survey, Thailand's GDP would expand 3.4% this year, 4.1% in 2023, and then 3.5% in 2024.
However, inflation is still a problem. The headline rate decreased to 7.61% in July but remained close to the 14-year high reached in June and significantly higher than the Bank of Thailand's (BOT) target range of 1%-3%.
According to Tim Leelahaphan, an economist at Standard Chartered, "there's no obvious indicator that inflation would clearly come down or dramatically reduce."
