The central bank is concerned that the country’s economy may grow less than 3.2% this year, attributing Brexit and the ongoing clampdown on zero dollar tours as main reasons.
Jaturong Jantarangs, an assistant governor of the Bank of Thailand’s monetary policy group and the Monetary Policy Committee (MPC) secretary, stated the United Kingdom’s decision to leave the EU has major global implications directly affecting the global economic recovery, which in turn will mean that Thailand and its major trading partners will also see their economies growing at less that acceptable levels.
Compounding the matter further, especially for Thailand, is the negative impact on the tourism sector by the recent emergence of so-called zero-dollar tours that have resulted in an expected reduction of Chinese tourists to the country, he said.
Zero-dollar tours or ‘kickback’ tours involves packaged tours that are priced below cost to lure budget travelers.
These operations are subsidized through third-party firms which in turn sell overcharged goods and services to tourists.
The impact they will have on Chinese visitors to Thailand during the later part of 2016 is projected to be around a 200,000 reduction in tourist numbers.
For the past 5 years the ratio of tourism to the GDP for Thailand stood at around 9 -10%. At present that ratio has risen to 15%, which has greatly helped to offset the contraction in national exports. Chinese tourists have played a significant part in this and as such the government’s ongoing clampdown would have a significant impact on the economy.