Thai economy continues to expand due to robust recovery in tourism: BOT

JUNE 01, 2023

Despite a drop in exports and government spending, Thailand’s economy continues to expand due to the robust recovery of the tourism industry, according to the Bank of Thailand.

Sakkapop Panyanukul, senior director of the bank’s macroeconomic department, said on Wednesday that private consumption increased in April due to rising tourist arrivals, but exports dropped due to a decline in industrial production and private investment.

Government expenditures also dropped slightly in April due to an acceleration in disbursement in the previous year, Sakkapop said.

He said headline inflation fell on a decline in fresh-food prices, but this was offset by rising global crude oil prices.

Unemployment also fell as the economy continued to expand.

He summarised the economic condition in April as follows:

Exports: Exports in April totalled 749.8 billion baht (US$21.51 billion), down 4.9% from the previous month due to a decline in trade partners’ demand. However, exports of some products, particularly agricultural produce, rose.

Imports: Imports rose from the previous month, especially the import of crude oil, natural gas and consumer goods. However, the import of materials, such as rolled steel and plastic, fell.

Foreign tourist arrivals: The number rose from the previous month, with gains mainly from China and Malaysia. However, tourists from some countries dropped slightly, including Europe (excluding Russia), Australia, and the United States.

Private consumption: Hotel and restaurant businesses recovered. The expense of non-durable goods remained stable, but the expense of durable goods, such as motorcycles and cars, fell. Household purchasing power has improved with higher employment and consumer confidence, but the rising cost of living is still weighing on overall consumption.

Industrial production: Production fell from the previous month, especially for automobiles, food and beverages, and hard disks. However, the production of electronic parts increased on higher demand for electrical appliances.

Private investment: Compared to the previous month, private investment fell due to a decline in machine and equipment investment. However, investment in construction rose, especially in the residential and industrial sectors.

Government expenditure: Government spending fell slightly year on year due to an acceleration in disbursement in suburban train systems last year. State enterprises’ expenditures expanded due to investment in telecommunication and utilities.

Economic stability: Headline inflation fell due to a decline in fresh-food prices, especially pork. However, the inflation in the fuel category rose in line with global crude oil prices.

Exchange rates: The baht strengthened against the US dollar due to declining expectations that the US Federal Reserve will aggressively increase interest rates. Global financial markets also have a positive view of the Thai economic recovery.

Source : The nation