Driven by increased tourist arrivals, Thailand’s economy grew by 3.1% in the second quarter

According to the median forecasts of 21 analysts polled by Reuters, Thailand’s GDP grew 3.1% year on year in the April-June quarter, up from 2.7% in the previous quarter, driven by increasing foreign tourist arrivals.

According to a smaller sample of projections in the Aug. 14-17 poll, GDP was expected to rise by a seasonally adjusted 1.2% in the third quarter, a drop from the 1.9% growth in the previous quarter.

While the country’s tourism-driven economy is expected to gradually improve, visitor numbers remain much lower than pre-pandemic levels. Thailand is expecting 29 million tourists this year, down from 40 million in 2019, the last full year before the COVID outbreak. 

Exports, a crucial source of development, have fallen since October 2022, reflecting a drop in global demand, particularly from China, Thailand’s largest trading partner. 

“The ongoing recovery in foreign tourism, including from China, and resilient private consumption underpinned the economic expansion,” stated Chua Han Teng, analyst at DBS. 

“Yet, despite stabilizing, the drop in merchandise exports continued to drag headline growth and prevented a stronger growth improvement in 2Q23, given the challenging global economic environment.”

According to a separate Reuters poll, growth will average 3.7% this year, matching the Bank of Thailand’s forecast, and 3.8% in 2024.