Thai economy accelerates on exports, tourism as borders opened

Thailand’s economy regained momentum last quarter, buoyed by rising exports and tourist arrivals, firming its recovery as it faces risks this year from inflation and the omicron variant.

Gross domestic product during October-December rose 1.9% from a year ago, the National Economic and Social Development Council said Monday. That’s better than the median estimate of 0.8% year-over-year growth in a Bloomberg survey of economists, and compares with the prior quarter’s revised 0.2% contraction.

As part of its “living with Covid” strategy, Prime Minister Prayuth Chan-Ocha’s government has gradually relaxed restrictions to boost the economy, which had the slowest growth in Southeast Asia last year. Rising price pressures—which last month exceeded the central bank’s inflation target for the first time since April 2021—and the omicron wave have raised concerns about the recovery this year.

The economy grew 1.6% in 2021, rebounding from a revised 6.2% contraction in 2020. Economists had forecast 1.2% growth last year. On a seasonally adjusted basis, GDP rose 1.8% in the fourth quarter from the previous three months, when it fell a revised 0.9%, the NESDC said.

The consumer price index rose 3.23% in January, above the Bank of Thailand’s 1%-3% target. The central bank, which earlier this month held its benchmark interest rate at a record low for a 14th straight meeting, said average headline inflation this year is likely to exceed its 1.7% forecast.

A tourism revival may help jumpstart the economy after the government reopened the country’s borders last November. Thailand welcomed 230,497 tourists in December, the highest monthly figure since March 2020, at the start of the pandemic. Still, the total of 427,869 foreign visitors in 2021 was a fraction of the 40 million in 2019, when the tourism industry generated revenue of more than $60 billion.