According to Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput, Thailand’s economy is expected to grow 3.6% this year, adding that fiscal and monetary policy should prioritize stability rather than economic stimulus.
The BOT increased interest rates by a quarter point to 1.75% last month and has increased its benchmark rate by a total of 125 basis points since August, forecasting that the Thai economy is expected to continue expanding, driven mainly by recovery in the tourism sector.
3.6 and 3.8 percent Growth projection for 2023 and 2024
Growth projection for 2023 and 2024 was 3.6 and 3.8 percent, respectively, supported by several factors.
First, the tourism sector continued to recover robustly, with the number of foreign tourists picking up across most source countries.
Tourist arrivals were expected to reach 28 million and 35 million for 2023 and 2024, respectively, an upward revision from the January assessment of 25.5 million in 2023 and 34 million in 2024.
Second, improving employment and labor income, especially for the service and self-employed sectors which benefited from tourism recovery, should help support private consumption.
Third, merchandise exports started to rebound after contracting in the last quarter of 2022 and should gather momentum in the second half of 2023 consistent with trading partners’ growth.
Nevertheless, certain merchandise exports could recover more slowly than others, including electronics whose global demand was undergoing a cyclical downturn, and petrochemical which was affected by China’s dual circulation strategy. Overall, the risk to Thai economic growth was tilted to the upside from the number of foreign tourist and their spending which could exceed expectations. The Committee, however, noted the downside risks from highly uncertain global financial and economic outlook