Thailand’s economy will likely grow by 1.5 per cent this year, thanks to a hike in spending from foreign visitors.
The University of the Thai Chamber of Commerce (UTCC) said that the country’s economic crisis is starting to slowly improve as the tourism industry starts to come back to life.
“The Thai economy has passed its lowest point already,” UTCC President Thanawat Polvichai said in a briefing on Thursday.
“A loosening in business restrictions and the return of foreigners would inject an additional 250-300 billion baht to the economy at the end of the year,” he explained, adding that Covid-19 infections and death rates were also improving day by day.
The tourism industry is one of Thailand’s main economic sectors, accounting for 6-7 percent of its GDP in 2020.
Last year when the epidemic ravaged the world’s economy, Thailand recorded a 6.1-per-cent contraction in its gross domestic product (GDP). Now, the nation is still battling the prolonged effects of the pandemic, but economic growth is expected to be modest this year.
Thanawat, however, warned that the rise of household debt is still a concerning issue. He forecasts that the household debt ratio to GDP will be 94.1 per cent by next year.
Meanwhile, the financial relief measures for small and medium enterprises (SMEs) are still crucial, as some business owners, especially those outside Bangkok, still do not have access to schemes, according to the UTCC.
Looking forward, Thanawat projects the Thai economy will grow by 4.2 per cent in 2022.
“There is no concern that the reopening will lead to the return of the outbreak inside the country,” he added.
The latest GDP projection from the Bank of Thailand is 0.7-per-cent growth for this year and 3.5-per-cent growth for the next year.
“As inoculation goes as planned, the signs of recovery are getting clearer,” Thanawat concluded.