The Bank of Thailand predicts 6 million foreign tourist arrivals this year and 19 million in 2023 as pandemic-era curbs ease. It also forecasts economic growth of 3.3% this year and 4.2% next year (2023) after seeing 1.5% growth last year.
However, analysts noted slower tourism recovery than expected as Chinese tourists are unable to visit due to stringent travel restrictions that ban outbound and returning travel in China according to so-called “zero Covid policy”.
China accounted for over a quarter of the 40 million foreign visitors in pre-pandemic 2019 figures of Thailand tourism inflow.
However, the Committee also assessed that the Thai economy will expand at 3.3 percent in 2022 and 4.2 percent in 2023 on the back of better-than-expected recovery in domestic consumption, and tourism following the relaxation of border controls in Thailand and other countries.
Meanwhile, the impact of COVID-19 and the conflict between Russia and Ukraine on the Thai economy will be limited. However, the Committee will monitor key risk factors to economic recovery, especially the impact of higher prices on living costs for households.
The Monetary Policy Committee’s projection for this year is that the country’s inflation will reach 6.2%, which is higher than the previous forecast of 4.9%.
Last week the Bank of Thailand kept its key policy rate unchanged at 0.5%, amid growing pressure coming from rising prices and monetary policy tightening by its peers.
But according to a Bot statement, the financial system remains resilient. Commercial banks have high levels of capital fund and loan loss provision. Liquidity in the financial system remains ample, although liquidity distribution still varies across economic sectors. Some households and businesses remain vulnerable to rising living and production costs as their incomes have not fully recovered in addition to their high levels of debt.