Thailand’s economy likely picked up speed in the first quarter aided by a strong recovery in the tourism sector and a rebound in private consumption, but a weakening global economy poses the biggest risk to the outlook, a Reuters poll found.
The tourism-reliant economy’s recovery has lagged its regional peers due to the COVID-19 pandemic, but turned a corner with the return of Chinese tourists in recent months boosting employment and domestic demand.
Thailand’s economy grew 2.3% in the January-March quarter from a year ago, up from 1.4% growth in the prior quarter, according to the median forecast of 20 economists polled May 8-11.
On a quarterly basis, gross domestic product (GDP) was forecast to have grown a seasonally-adjusted 1.7%, after contracting 1.5% in the previous quarter, the survey showed.
Forecasts ranged from 0.4% to 2.3% for the data due to be released on May 15.
“Growth was mainly driven by the ongoing recovery in foreign tourism as Chinese visitors began to make a comeback following China’s reopening, as well as private consumption boost,” noted Han Teng Chua, economist at DBS.
“That said, given the still-challenging global external environment…net goods trade was likely a drag to headline growth in 1Q23, even though to a smaller extent than in 4Q22.”
Thailand beat its target of 6 million tourist arrivals in the first quarter, recording 6.15 million visitors between January and late March, government data showed.
A sharp fall in inflation from a 14-year peak of 7.86% in August last year to 2.67% last month has also helped boost consumer spending.
Growth was expected to average 3.7% this year, slightly above the Bank of Thailand’s (BOT) estimate of 3.6%. It was then forecast to rise to 3.8% in 2024, a separate Reuters poll showed.