September 24, 2022

Finance & Economy

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Economy likely grew modestly in Q1

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Thailand Mobile Expo 2022 and Thailand Crypto Expo 2022 are taking place at Bangkok International Trade & Exhibition Center (Bitec) until May 15. (Photo: Arnun Chonmahatrakool)

Thailand’s economy likely grew modestly in the first quarter, thanks to robust exports and an easing of Covid-19 restrictions and despite low tourist arrivals and high inflation dampening consumer spending, a poll found.

Southeast Asia’s second-largest economy is estimated to have expanded 2.1% in the January-March period compared with the same period a year earlier, according to a poll of 15 economists, conducted by Reuters from May 6 to 13. It showed annual growth of 1.9% in the previous quarter.

“We expect Thailand’s GDP to recover moderately in 1Q22, given a rebound in economic activities after Covid restrictions eased,” said Lalita Thienprasiddhi, senior researcher at Kasikorn Research Center.

“Tourism recovery and strong exports will be the main driving factors for the Thai economy in 1Q22,” she said.

First-quarter gross domestic product (GDP) was estimated to have been 0.9% higher than in the previous quarter, according to a smaller sample of forecasts. That would be half of the quarterly growth of 1.8% in the fourth quarter of 2021.

Estimates of the latest quarterly change ranged from a 0.8% contraction to 1.7% growth, highlighting the uncertainties surrounding the recovery of the economy from the pandemic.

The data is due to be released on May 17.

“A deceleration of GDP growth is expected due to impacts from the Russia-Ukraine conflict, a decline in consumer confidence with soaring inflation and a decline in household non-energy spending” said Phacharaphot Nuntramas, chief economist at Krung Thai Bank.

Inflation has remained above the Bank of Thailand’s upper limit of 3% so far this year and is expected to remain there until the end of the year, according to a separate Reuters poll.

The tourism-reliant economy is on track to receive just 6.1 million foreign visitors this year, falling short of an earlier projection of 7 million because of China’s travel restrictions and curtailment of Russian visits due to the war in Ukraine.

In 2019, before the coronavirus pandemic, Thailand received nearly 40 million visitors.

GDP for all of 2022 is expected to be 3.5% higher than a year earlier, according to another Reuters poll, in line with recently trimmed government projections and the IMF.