Thailand’s Q4 economy slows as exports decline

Thailand’s Q4 economy grew by 1.4% in the final quarter of 2022 with hopes high for a tourism-led recovery.

Southeast Asia’s second-largest economy grew slower than expected in the fourth quarter of 2022 as exports and manufacturing declined. The much-anticipated rebound in tourism will continue to boost the recovery this year as global demand for manufactured goods declines.

On a quarterly basis, GDP contracted by a seasonally-adjusted 1.5% in Q4, ending starry-eyed expectations of a 0.5% rise, data from the National Economic and Social Development Council (NESDC) showed on Friday.

Service driven exports

On the expenditure side, Thailand’s Q4 economy was mainly driven by the export of services, expansion of private consumption, and public investment. Nonetheless, the export of goods and government expenditure contracted.

In foreign trade, export value was US$66 billion (2.2 trillion baht), a 7.5% contraction compared to a 6.7% growth in the previous quarter. Export volume dropped by 10.3%.

In 2022, the tourism-dependent side of Thailand’s Q4 economy expanded by 2.6%, after growing by 1.5% in the previous year, which was among the slowest growth in Southeast Asia.

Despite the slower fourth quarter, Al Jazeera expects the economic recovery to gain some traction, with China’s earlier-than-expected reopening proving a further boost to the tourism sector, helping offset some of the impacts of weakening exports.

Tourism targets

On Friday, the NESDC predicted the economy would grow 2.7% to 3.7% this year, down from a previous forecast of 3% to 4%.

With the return of China’s visitors, the agency now expects Thailand to receive 28 million foreign tourist arrivals this year, up from the 23.5 million projected earlier.

Thailand beat its tourism target in 2022 with 11 million foreign visitors. It welcomed a record of nearly 40 million visitors in pre-pandemic 2019 who spent 1.9 trillion baht (US$55 billion).