Thai GDP growth forecast sees downward revision as tourism revenue below estimates

The downward adjustment is due to assumptions of reduced per capita spending by tourists per trip, although the number of tourists is still expected to be around 29.5 million. Additionally, exports are expected to contract by 0.8%, according to Fiscal Policy Office director-general Pornchai Thiraveja.

Regarding the revision in tourist income estimates, it was initially expected that there would be an increase in Chinese tourists, Pornchai said. However, currently, the majority of tourists are coming from Malaysia, with lower per capita spending, leading to an estimated 50 billion baht reduction in income from tourists this year. As a result, the total tourist income for the country this year is projected to be 1.25 trillion baht from the estimated 29.5 million tourists.

The Thai economy this year, however, is expected to receive support from an increase in private consumption, which is predicted to expand by 4.5%, driven by easing inflationary pressures. Additionally, factors such as private sector investments are estimated to grow by 2.6%, and government investments are projected to expand by 2.2%.

Pornchai said the key factors that would impact the Thai economy and would need close monitoring were:

● Continuing recovery in the tourism sector, particularly from major countries like China, Malaysia, South Korea, India, and Russia.

● The global oil price situation, which affects inflation trends in the country.

● The state of the global economy, particularly the economies of the United States and China.

● Geopolitical tensions in different regions, such as the conflict between Russia and Ukraine and strategic competition between China and the US, which may affect global supply chains and international trade.