Thailand Economy Update: Tourism Boosts Growth Despite Export Decline in February

(CTN News) – Thailand’s economy grew slightly in February, with growth in the service sector and a rise in tourist arrivals offsetting a drop in exports from the previous month, the Bank of Thailand (BOT) reported on Friday.

According to the BOT, Thailand posted a $2 billion current account surplus in February, up from a $0.2 billion loss the previous month.

According to tourism ministry figures, Thailand had received 8.73 million foreign tourist arrivals this year as of March 24, up 44% yearly, with 1.63 million visitors from China.

The government aims for 40 million international visitors this year, up from 28 million in 2023.

Assistant Governor Chayawadee Chai-Anant said at a briefing that tourism will support the economy in March, but export recovery and industrial manufacturing will need to be properly monitored.

She noted that the BOT is watching the global economic recovery, government spending, and economic stimulus measures.

Southeast Asia’s second-largest economy unexpectedly contracted 0.6% in the fourth quarter of 2023 from the third, with full-year growth of 1.9%, lower than 2.5% in 2022.

Last month, the central bank cut its 2024 growth forecast to 2.5%-3.0% from 3.2%.

According to a local industry association, car output in Thailand’s regional auto center plummeted 19.28% in February compared to the previous year, owing primarily to a drop in pickup truck production and an increase in imported electric cars (EVs).

This week, BOT Governor Sethaput Suthiwartnarueput stated that the first-quarter GDP was “not likely to look pretty,” but that drag factors will reduce later in the year and that the BOT must ensure the policy rate was suitable for sustaining long-term growth.

Despite government pressure to loosen policy, the BOT maintained its key interest rate at 2.50%, the highest in over a decade, in a split decision. It will conduct its next monetary policy review on April 10.