Thailand Relies Even More on Tourism as Global Slowdown Hits Exports

Thailand’s economy is expected to grow 3.8 percent this year, helped by a rebound in the vital tourism sector, while inflation should cool to its target range, the finance minister said on Saturday.

Domestic spending has increased and the government will accelerate large project investment to help growth, Arkhom Termpittayapaisith told a Radio Thailand programme.

As the global slowdown hurts exports, “tourism is our hope,” he said.

Southeast Asia’s second-largest economy expanded a weaker-than expected 2.6 percent last year, lagging that of others in the region as its tourism sector just started to pick up.

The finance ministry has forecast 27.5 million foreign tourist arrivals this year, after Thailand beat its forecast in 2022 with 11.15 million visitors. There were nearly 40 million foreign tourists in pre-pandemic 2019.

Arkhom told Reuters this month that economic growth could beat forecasts, with the return of Chinese tourists.

He said on Saturday that any aggressive interest rate hikes would increase business costs and household debt, as the central bank has said rate increases will continue to curb consumer prices.

Headline inflation should return to the central bank’s target range of 1 percent to 3 percent this year, helped by government measures and lower food prices, Arkhom said. Inflation hit a 24-year high of 6.08 percent last year.

A baht exchange rate of 34 to 35 per dollar is helpful for export prices despite falling export volumes, he added. The Thai currency closed at 34.8 per dollar on Friday.

(Reporting by Orathai Sriring, Kitiphong Thaichareon and Satawasin Staporncharnchai; Editing by William Mallard)

This article was written by Satawasin Staporncharnchai and Orathai Sriring from Reuters and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to [email protected].