Thailand’s economy slows amid declining exports, manufacturing

Thailand’s economic growth slowed more than expected in the fourth quarter of 2022 as exports and manufacturing declined but a rebound in the vital tourism sector should continue to boost the recovery this year amid weaker global demand.

Southeast Asia’s second-largest economy expanded 1.4 percent in the October-December period from a year earlier, data from the National Economic and Social Development Council (NESDC) showed on Friday.

On a quarterly basis, gross domestic product (GDP) contracted a seasonally adjusted 1.5 percent in October-December, missing expectations for a 0.5 percent rise.

In 2022, the tourism-dependent economy expanded by 2.6 percent, after growing by 1.5 percent in the previous year, which was among the slowest growth rates in Southeast Asia.

Despite the slower fourth quarter, the economic recovery is expected to gain some traction, with China’s earlier-than-expected reopening proving a further boost to the tourism sector, helping offset some of the impact of weakening exports.

On Friday, the NESDC predicted the economy would grow 2.7 percent to 3.7 percent this year, down from a previous forecast of 3 percent to 4 percent growth.

With the return of China’s visitors, the agency now expects Thailand to receive 28 million foreign tourist arrivals this year, up from the 23.5 million projected earlier.

Thailand beat its tourism target in 2022 with 11.15 million foreign visitors. It welcomed a record of nearly 40 million visitors in pre-pandemic 2019, who spent 1.91 trillion baht ($55.75bn).