Bangkok, 23 February 2022 (TDI): Economic recovery in Thailand is slated to remain fragile and uneven even though prospects for growth are positive, after a substantial rebound in the last quarter of 2021.
This is mainly due to an increase in COVID cases due to the spread of the new, highly contagious omicron variant. The Thai economy showed tremendous recovery in late 2021, rebounding more than expected.
The government maintained economic growth at 3.5%-4.5%, this figure was fixed keeping in mind the limited effects of the Omicron variant and a resurge in tourism and continued exports and investments.
In 2022, Thailand is likely to perform well in the first quarter, there is some inflationary pressure that could cause it to go beyond the current target of 3%, but persistent increases in inflation are unlikely.
“The main driver will be exports and fiscal disbursement, with tourism and domestic consumption adding to the support.” -NESDC Chief Danucha Pichayanan.
The Bank of Thailand, on February 1st, decided to leave the interest rate at 0.5% which is a record low, this was done in a bid to help stimulate the economy by increasing investments and spending.
The Bank also forecasted that the country would grow by just 3.4% this year, up from 1.6% in 2021. The Central Bank is expected to continue to put an emphasis on economic recovery.
Exports increased by 21.3% year-on-year in December while private consumption rose by 0.3%. Foreign tourists also increased from 45,000 in the third quarter to 340,000 in the fourth quarter.
The country also issued a quarantine waiver for international travelers in a bid to stimulate its tourism industry. 5.5 million tourists are expected to enter the country in 2022, which is still low compared to the pre-pandemic levels of 40 million.
This is indicative of uneven recovery for the country. The Thailand Baht (THB) remains volatile, mainly fueled by interest rate hikes across the world. The government also continues to provide stimulus packages to help the economy.
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