Tourism revival boosts Thai economy but exports sluggish

Thailand’s economy expanded by 2.6 per cent last year on the back of a tourism recovery and strong consumer confidence but an export slowdown dragged on growth, officials said Friday.

The figure was below expectations and followed 1.5 per cent growth the previous year.

Southeast Asia’s second-largest economy ran out of steam in the fourth quarter with only 1.4 per cent growth year on year, down from 4.6 per cent in the previous quarter, according to Thailand’s National Economic and Social Development Council.

“The growth was driven mainly by the tourism recovery and continual improvement of domestic demand in both private consumption and investment,” the council said. Border restrictions during the coronavirus pandemic battered the kingdom’s key tourism industry, which previously contributed around a fifth of national income.

While visitor numbers are steadily increasing again with 11.2 million international arrivals last year, the number is a far cry from the 40 million recorded in 2019.

Thailand is now banking on a return of tourists from China, which was previously the biggest source of visitors.

Across other sectors, goods exports were sluggish in the fourth quarter following weaker demand from the United States and Europe.

Headline inflation stood at 6.1 per cent in 2022, but private consumption still expanded 6.3 per cent through the year.

The council is forecasting the Thai economy will expand by between 2.7 and 3.7 per cent this year.