Thai economic recovery will be visible from Q3 onwards: UTCC
Thailand’s economic recovery from the Covid-19 fallout should become visible in third quarter of this year thanks to the influx of tourists sparked by the lifting of entry restrictions.
“We estimate the gross domestic product [GDP] expansion for the year to be in the scope of 2.5 to 3.5 per cent or an average of 3.1 per cent year on year,” rector of the University of the Thai Chamber of Commerce (UTCC) Thanawat Polvichai said on Thursday.
Thanawat is also chief adviser to the university’s Centre for Economic and Business Forecasting.
“The expansion in the third quarter will be the most prominent at 4.1 per cent year on year, while in the last quarter it will be 3.8 per cent. Thailand can expect some 6 to 8 million tourists this year, generating revenue of around 50 billion baht per month,” he added.
The centre also said the export sector will expand 5 to 7 per cent year on year, while the average inflation rate will be 6.2 per cent.
“The inflation will peak at 7.6 per cent in the third quarter as manufacturers will gradually raise their prices to cope with rising costs from surging energy prices. However, this will come down to around 5.5-6.5 per cent in the last quarter,” he said.
Thanawat, meanwhile, estimates that the Monetary Policy Committee will up the policy rate three times this year from July onwards to tackle inflation. By yearend, Thailand’s policy rate should be 1.25 per cent.
UTCC also said that Thailand’s Consumer Confidence Index (CCI) rose to 41.6 in June, up from 40.2 in May and the highest in six months.
“Our survey shows that consumers are starting to feel a slight revival of the economy as the Covid-19 situation is improving and restrictions are being lifted, especially for foreign arrivals,” Thanawat said.
“Consumers are, however, concerned about the rising price of fuel and cost of living, weakening of the baht and impact of the Russia-Ukraine war that might further drive up the global price of oil.”