BANGKOK (Reuters) – Thailand’s economic recovery remained on track in July as private spending increased and the tourism sector expanded on higher foreign tourist arrivals, while exports declined, the central bank said on Thursday.
Economic activity going forward would mainly rely on tourism as exports, a key driver of growth, were not expected to improve until the final quarter of 2023, Sakkapop Panyanukul, a senior director at the Bank of Thailand (BOT), told a briefing.
For August and the rest of the year, the BOT would monitor a slowdown in trading partners, policies of the incoming Thai government and the impact of El Nino weather patterns on the production and price of farm products, he said.
The BOT is likely to reduce its 3.6% economic growth forecast for this year after a weaker-than-expected second quarter, Sakkapop said. This month, the BOT governor also flagged an outlook downgrade, which will be published in September.
Sakkapop, however, said there should not be a “scary” outlook reduction as tourism was still recovering.
The BOT has predicted 29 million tourist arrivals this year, compared with nearly 40 million visitors in pre-pandemic 2019.
Southeast Asia’s second-largest economy grew 1.8% in the April-June period on the year and 0.2% on the quarter, sharply slowing from the previous quarter’s 2.6% and 1.7%, respectively, as exports slumped.
The economy has wobbled from slowing global growth and falling investor confidence due to prolonged political uncertainty following elections in May.
A new government is, however, expected to start work soon as Prime Minister Srettha Thavisin is set to finalise his cabinet in the coming days before it is sent for royal approval.
Sakkapop said the new government’s handout via digital wallets, worth 560 billion baht ($16.03 billion), would have an impact on both the economy and inflation which will be assessed later.
In July, exports contracted 5.5% from a year earlier.
The country recorded a current account deficit of $0.4 billion in July, after a surplus of $1.4 billion the previous month, the central bank said.
($1 = 34.94 baht)
(Reporting by Orathai Sriring, Kitiphong Thaichareon and Satawason Staporncharnchai; Writing by Chayut Setboonsarng; Editing by Peter Graff)
