BANGKOK (Reuters) – Thailand’s economy is expected to grow 3.0% to 3.5% this year, a leading joint business group said on Wednesday, as the vital tourism sector rebounds but exports weaken as global growth slows.
Exports, also a key driver of growth, are expected to be flat or fall up to 1% this year, compared with a previous forecast of a rise of 1% to 2%, said the group, which has representatives from industry, banking and commerce.
However, the group now predicts foreign tourist arrivals at 25-30 million this year, up from a previous forecast of about 22 million, thanks to the return of Chinese tourists, group chairman Kriengkrai Thiennukul told a news conference.
China’s reopening is providing a further boost to Thailand’s tourism sector, which typically accounts for about 12% of gross domestic product (GDP).
As exports are likely to decline for a while, Thailand should focus on boosting domestic consumption and accelerating government spending, the group said in a statement.
Relevant agencies should maintain baht currency stability and help ease the impact of rising interest rates, it added.
Despite a quarter-on-quarter economic contraction at the end of 2022, the group said the economy should see growth in the first quarter of this year, avoiding a technical recession, on the back of the tourism boom.
“We are confident that GDP will not fall and there won’t be a technical recession because the service sector has returned much more than expected,” Kriengkrai said.
Southeast Asia’s second-largest economy grew 2.6% in 2022, less than expected.
(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Ed Davies, Kanupriya Kapoor)
