By Devayani Sathyan
BENGALURU (Reuters) – Thailand’s economy grew at its fastest pace in more than a year last quarter, boosted by a rebound in tourism and private consumption, but the outlook was clouded by risks of a global economic slowdown, a Reuters poll predicted.
The recent recovery in tourism, which accounts for about 12% of GDP, offered Thailand’s ailing economy a lifeline in the aftermath of the COVID-19 pandemic but China’s economic setbacks have darkened prospects.
Growth in Southeast Asia’s second-largest economy was estimated at 4.5% year-on-year in the third quarter, according to the median forecast of 13 economists polled on Nov. 11-16, up from 2.5% growth in the previous quarter.
On a quarterly basis, gross domestic product (GDP) was forecast to have grown a seasonally-adjusted 0.9% from 0.7% in the preceding quarter, the median forecast from a smaller sample showed.
Forecasts ranged from 0.2% to 1.2%, highlighting uncertainties surrounding the post-pandemic recovery. The data will be released on Nov. 21.
“The strong recovery of tourism, as well as the pick-up of consumption likely led the charge in pushing GDP to grow in the third quarter, wherein the push from the former was likely stronger than the latter,” wrote Aris Dacanay, ASEAN economist at HSBC.
“As tourists return more and more by the months regardless of the global challenges ahead, we think Thailand will likely pose another strong GDP print next quarter, and even for 2023.”
Analysts in a separate Reuters poll expected GDP growth to average 3.3% this year, in line with the Bank of Thailand’s estimate, and then rise to 4.0% in 2023 when tourist arrivals are expected to gather pace.
After some pandemic curbs were lifted late last year, the tourism-driven economy made a steady recovery and is expecting more than ten million tourist arrivals in 2022 and 21 million next year.
That will still be only slightly more than half the visitors welcomed before the pandemic. In 2019, the country recorded 40 million tourist arrivals with more than a quarter of those from China.
“A full and faster recovery in Thailand’s crucial tourism sector is still highly dependent on China’s shift away from zero-covid policy and revival in Chinese outbound foreign travel,” wrote Chua Han Teng, economist at DBS.
With the economy expected to return to pre-pandemic levels next year, the Bank of Thailand (BOT) is likely to continue with a moderate pace of tightening to support the fragile recovery despite inflation running close to a 14-year high.
The BOT has hiked interest rates by a total of 50 basis points since August.
(Reporting by Devayani Sathyan; polling by Maneesh Kumar; Editing by Ross Finley and Ana Nicolaci da Costa)