Tourism boom shields Thailand’s economy amid political uncertainty

North of Thailand, Image via Flickr

As political uncertainty continues to loom over Thailand, the country’s economy is receiving a much-needed boost from the significant increase in foreign tourists. In the first quarter of 2023, Thailand welcomed 6.5 million visitors, a stark contrast to the 498,000 recorded in the same period a year earlier. This surge in tourism is expected to help bolster the nation’s economy, even as export growth falters.

Thitima Chucherd, an economist at Bangkok-based Siam Commercial Bank (SCB), stated, “Tourism will be the key pillar supporting our growth this year.” Chucherd also noted that while government spending, consumption, and investment may be affected by the political situation, tourism is likely to remain unaffected.

Tourism’s resurgence as a driving force in Thailand’s economy comes as the nation awaits the outcome of recent elections. Pro-democracy parties secured the majority of seats in the House of Representatives, but the support of 250 military-appointed senators will be crucial in determining the next prime minister.

Any delay in government formation could impact the budget for the fiscal year starting in October, potentially affecting state spending. However, Thailand’s statistic agency secretary-general, Danucha Pichayanan, expressed confidence that the budget would not be delayed past the first three months of 2024.

Economists predict that Thailand’s gross domestic product (GDP) will grow 3.6% this year, up from 2.6% in 2022, making it the only Southeast Asian economy to experience faster expansion every year since the pandemic-induced downturn in 2020.

A significant factor in the growth of Thailand’s tourism industry is the reopening of China, which accounted for nearly a third of the country’s foreign visitors before the Covid-19 pandemic. However, Krystal Tan, an economist at Australia & New Zealand Banking Group, cautions that any escalation in political uncertainty could adversely impact tourism growth, as tourists are known to be sensitive to political instability, reports Bangkok Post.

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Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.