Thailand’s Economy Improves On Tourism Rebound

From April to June, Thailand’s economy increased at its quickest rate in a year as COVID-19 restrictions were loosened,  particularly in travel and tourism. However, multi-year high inflation and China’s downturn continue to weigh on the country’s economic recovery.

The government marginally changed its economic growth prediction for 2022 from 2.5% to 3.5% to 2.7% to 3.2%, citing a recovery in the tourism industry, increasing exports and consumption.

According to data released by the National Economic and Social Development Council, Thailand’s economy improves at an annual rate of 2.5% in the 2nd quarter of 2022.

According to Capital Economics, Thailand’s economic recovery will improve over the next few months.  However, increasing commodity prices could affect the growth forecast.

On a quarterly basis, the gross domestic product or GDP increased by 0.7% in April-June, a miss of the expected 0.9%.

According to Kobsidthi Silpachai, director of capital markets research at Kasikornbank, “This is the effect of the Ukraine-Russia war, which significantly increased import costs and inflation.”

Kobsidthi Silpachai believes that the Bank of Thailand will increase rates by 25 basis points in September to carefully assess the impact of its previous move and the position of the US Federal Reserve.

SOURCE: Reuters

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