Thai economy returns to growth in Q4 on exports, tourism

Thailand’s economy returned to growth in the fourth quarter, rebounding more quickly than expected, on robust exports and a recovery in domestic activity following an easing of coronavirus curbs and as borders reopened to foreign visitors.

The government maintained its economic growth outlook at 3.5-4.5 percent, counting on a limited effect from the Omicron-driven coronavirus outbreak, stronger domestic demand, a recovery in tourism and continued support from exports and public investment.

[Is the growth outlook in the line above for 2022?]

In 2021, Thailand’s economy grew 1.6 percent, one of the slowest in Southeast Asia, after a 6.1 percent contraction in 2020.

Southeast Asia’s second-largest economy expanded a seasonally adjusted 1.8 percent in the December quarter from the previous three months, data from the National Economic and Social Development Council (NESDC) showed, outstripping a forecast 1.4 percent increase in a Reuters news agency poll, and after a revised seasonally adjusted 0.9 percent contraction in the third quarter.

The economy is likely to perform well in the first quarter of this year, based on indicators so far, but there is some inflationary pressure, NESDC chief Danucha Pichayanan told a news conference.

“The main driver will be exports and fiscal disbursement, with tourism and domestic consumption adding to the support,” he said.

Uneven recovery

From a year earlier, gross domestic product (GDP) grew 1.9 percent in October-December, beating a forecast 0.7 percent rise, and against a revised 0.2 percent contraction in the previous three months.

Exports, a key driver of Thai growth, jumped 21.3 percent in the December quarter from a year earlier, while private consumption rose 0.3 percent. There were about 340,000 foreign tourists in the fourth quarter of 2021, up from 45,000 in the previous three months.

Thailand resumed a quarantine waiver for foreign tourists this month to help revive its vital tourism sector, which normally accounts for about 12 percent of Thai GDP.

The state planning agency expected 5.5 million tourists in 2022, up from a forecast of five million in November. But that’s still well below 40 million foreign tourists in 2019, suggesting the economic recovery will be slow and uneven.

The agency maintained its forecast export growth at 4.9 percent this year.

The government has introduced billions of dollars of relief measures to revive the economy, while the central bank has left its key rate unchanged at a record low of 0.50 percent since May 2020.