Key business body banks on tourism for Thailand to maintain economic recovery momentum
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) on Wednesday adjusted its 2022 gross domestic product estimate to 3 to 3.5 per cent, changing from the previous estimate in June of 2.5 to 4 per cent.
“Although Thailand is still being pressured by a declining global economy as a result of international conflict, the committee believes that the tourism industry, which is recovering at a faster than expected pace, will help us sail through this crisis,” said JSCCIB chairman Sanan Angubolkul.
The committee, which comprises representatives from the Thai Chamber of Commerce, the Federation of Thai Industries, and the Thai Bankers' Association, estimated that total exports in 2022 would expand in the range of 7.0 to 8.0 per cent year on year, while headline inflation will be at 6.0 to 6.5 per cent.
“The recovery of the tourism industry is showing an upward trend above our expectation, with 1.17 million foreign visitors recorded in August. We believe that total foreign arrivals this year will be around 9-10 million people, whose spending will help create jobs and demand in tourist provinces,” said Sanan. “However, domestic consumption this year is likely to be affected by the rising inflation that diminishes people’s purchasing power.”
The JSCCIB also predicted that total damage from floods this year would be in the range of 5 to 10 billion baht. The committee estimated that rice output would be affected by the floods, but not to the level that could create a major impact on the overall economy. “We also believe that industrial entrepreneurs have been preparing their facilities to minimise the risk of floods affecting their operation,” said Sanan.
The committee said inflation would remain high throughout the year despite fuel price in the global market dropping to below US$100 per barrel. “Inflation, along with the weakening of the baht to 38 to the US dollar, would continue to raise import costs for industrial entrepreneurs,” said Sanan.
“Business operating cost will also go up as a result of rising electricity bills since September and increasing daily minimum wages from October. These could be the reason for entrepreneurs to consider further raising the prices of products and services in the rest of the year,” he said.