Thailand’s economy shrank unexpectedly in the fourth quarter due to a fall in exports, though officials have stated that a recession will be avoided this year thanks to a rebound in tourism. According to the National Economic and Social Development Council, GDP dropped 1.5% in the December quarter compared to the previous three months. Year on year, growth slowed to 1.4% in the same period, dragging the Southeast Asian economy’s full-year expansion to 2.6% in 2022.
While the figures caused concern about the country’s economic outlook, the council’s Secretary-General, Danucha Pichayanan, stated that the economy is unlikely to contract in Q1 2023 because of an increase in tourist arrivals and government stimulus measures. According to NESDC, the nation is predicted to receive about 28 million foreign visitors after China reopened its border, allowing the country to defy a global slowdown. The agency estimates that GDP will grow by between 2.7% and 3.7% in 2023, down from its previous estimate of 3%-4%.
The slump in exports was a significant drag on the Thai economy, according to Danucha, who said that while “other factors, especially tourism, are doing well… exports are the big drag.” In each of the months from October to December, outbound shipments dropped. While Thailand welcomed 11.2 million foreign tourists in 2022, the most since the Covid outbreak, around 28% of the nation’s 40 million annual visitors prior to the pandemic were from China. At least 12% of the economy comes from tourism, and a fifth of jobs are related to it.
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