Thailand’s economic recovery, primarily buoyed by tourism and domestic consumption, faces a potential setback as the Bank of Thailand (BOT) suggests a necessary downward revision of growth forecasts due to weak export performance this year.
BOT Governor Sethaput Suthiwartnarueput conveyed this sentiment during a central bank seminar. The initial growth projection of 3.6% now seems likely to be adjusted downward to the mid-3% range for the current year amid a noticeable deceleration in economic momentum.
The central bank’s May forecast had previously held steady at a growth rate of 3.6% for this year and 3.8% for the subsequent year. However, the actual economic expansion in 2022 stood at 2.6%, indicating a slightly subdued trajectory. The slowdown can be attributed in large part to the underperformance of exports, which have been adversely affected by global challenges. These include a variety of external factors that have dampened international trade.
Despite the export hurdles, Thailand’s recovery remains partially supported by robust private consumption and a gradual revival of the tourism sector. Sethaput highlighted the positive contributions of these sectors to the nation’s ongoing economic recuperation. Notably, the tourism sector anticipates welcoming around 29 million foreign visitors this year, reflecting confidence in the industry’s gradual rebound.
Sethaput added that deflation is declining more rapidly than anticipated, a development that has implications for the BOT’s approach to interest rate decisions. Going forward, the central bank’s stance on interest rates will be anchored to the broader economic outlook, rather than short-term fluctuations in data. (NNT)