Chinese economic stimulus to boost Thai tourism and economy
Analysts predict that China’s economic stimulus measures will spur an increase in Chinese tourists visiting Thailand, potentially driving the Thai economy to achieve a growth rate of at least 3% this year. This is due to the expectation that Beijing’s financial initiatives will simultaneously boost the economies of both nations.
Asia Plus Securities (APS) highlighted that China has rolled out several strategies to invigorate its economy, which will likely result in a rise in Chinese visitors to Thailand. Among these initiatives, the People’s Bank of China reduced its five-year loan prime rate by 0.25% to 3.95% in an attempt to support the property sector. In addition, the down payment requirement for first homes in the Hainan province was lowered from 25% to 20%, reported Bangkok Post.
Further to this, the China Securities Regulatory Commission is set to introduce new policies designed to stabilise the stock market. As a result, Chinese stock markets are currently attracting significant fund inflows, said APS.
“China has started to use economic stimulus measures, so its economy is projected to improve and its stock markets should rebound.”
The Chinese Ministry of Culture and Tourism recorded that during the eight-day Lunar New Year festival, which concluded on February 17, there were 474 million domestic trips. This marked an increase of 19% from the 2019 Lunar New Year. Furthermore, tourism spending reached a total of 633 billion yuan, representing a rise of 8% compared to 2019, said APS.
“China’s consumption is recovering, which will support economic recovery. This should also boost Thailand’s economy since China is Thailand’s largest trading partner and more Chinese tourists will visit Thailand.”
With Thailand also set to launch additional economic stimulus measures, it is predicted that the nation’s 2024 GDP growth rate will reach between 2.5% and 3.0%.
Forecasted GDP
In a separate study, Maybank, the Malaysia-based investment banking group, acknowledged that despite China’s subdued economic growth, the Chinese tourism market seems to have overcome any hesitations about travelling to Thailand. This is due to visa waivers and the resumption of flights between the two countries, which have now reached 90% of pre-pandemic levels.
During the Lunar New Year holiday, which ended on February 16, overseas spending by Chinese tourists rose by over 140% compared to last year’s Chinese New Year. Among Southeast Asian destinations, the increase was even more significant, at over 580%, with Thailand leading the way, followed by Malaysia and Singapore.
Maybank maintains its forecast for Thailand’s 2024 GDP growth at 3.2%, attributing this to the resurgence in tourism and a recovery in investment.
