Economy 2 MIN READ

Thailand cuts GDP growth outlook as exports weaken

April 25, 2023By Reuters

Thailand’s finance ministry has lowered its 2023 economic growth outlook to 3.6% from 3.8% projected earlier, on expectations of a fall in exports as global demand weakens, officials said on Tuesday.

Exports, a key driver of Thai growth, are expected to drop 0.5% this year, compared with a previous forecast for a 0.4% rise, Pornchai Thiraveja, head of the ministry’s fiscal policy office, told a briefing.

“A global slowdown is a drag on Thailand’s economic growth… and exports might not increase as thought,” he said.

Public consumption is expected to fall 2.1% this year due to an expected delay in Thailand’s 2024 fiscal budget as the country holds an election on May 14, Pornchai said.

However, growth in Southeast Asia’s second-largest economy, is expected to be propped up by tourism and domestic consumption, he said.

The economy expanded 2.6% last year and the recovery has lagged that of other Southeast Asian nations, with tourism just starting to rebound last year with 11.15 million foreign arrivals.

Thailand is expected to receive 29.5 million foreign tourist arrivals this year, with the return of Chinese visitors, versus 27.5 million projected earlier, Pornchai said.

Pre-pandemic 2019 saw a record of nearly 40 million foreign tourists, who spent 1.91 trillion baht (USD 55.62 billion). Tourism accounted for about 12% of gross domestic product (GDP).

The baht is expected to average 33.17 per dollar this year versus a previous forecast of 32.5, with the dollar supported by US rate hikes, fiscal policy advisor Wuttipong Jittungsakul said.

The ministry predicted average headline inflation at 2.6% this year, down from 2.8% projected earlier, and against a 24-year high of 6.08% last year.

(Reporting by Orathai Sriring, Kitiphong Thaichareon and Satawasin Staporncharnchai; Editing by Kanupriya Kapoor and Sam Holmes)

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