An economy dependent on tourism is recovering, but Thailand is managing that without ... international tourists.
Thailand’s economy likely returned to growth in the fourth quarter thanks to robust exports and easing of COVID-19 curbs, but the suspension of a quarantine waiver for foreign tourists probably dented the recovery, a Reuters poll found.
Growth in the tourism-dependent economy rebounded last quarter to 0.7% year-on-year after shrinking 0.3% in the July-September period, according to the median forecast of 12 economists polled Feb. 11-17.
On a quarterly basis, gross domestic product (GDP) was expected to grow by a seasonally-adjusted 1.4% during the same period after contracting 1.1% the previous quarter. The data will be released on Feb. 21.
Forecasts ranged from 0.4% to 1.9%, highlighting the uncertainties surrounding the recovery in the Southeast Asia’s second largest economy from the pandemic.
“We expect the strong improvement in merchandise exports would help the economy to slowly return to expansion in the fourth quarter,” said Charnon Boonnuch, an economist at Nomura.
“However, with the still-sluggish recovery in foreign tourist arrivals despite the border reopening in November, we expect the recovery to be gradual and highly uneven.”
Still, growth is yet to return to pre-pandemic levels and the recovery remains fragile, with the spread of the Omicron coronavirus variant weighing on the tourism industry.
Even with rising vaccination rates and the gradual easing of global travel restrictions, only a fraction of foreign tourists are expected this year compared with pre-COVID-19 levels.
The economy is expected to grow 3.9% this year and 4.1% in 2023, according to a separate Reuters poll published last month.
“The concern over the Omicron outbreak and temporary suspension of the ‘Test&Go’ tourism program in late December-January would affect the economic recovery and delay an international tourism recovery in early 2022,” wrote Lattakit Lapudomkarn, economist at Kiatnakin Phatra Securities.
“However, we expect the impact should be short-lived as the outbreak has proven less severe than expected.”
(Reporting by Vivek Mishra; Polling by Devayani Sathyan and Md Manzer Hussain; Editing by Kim Coghill)