(Bloomberg) — A revival in tourism helped Thailand expand at the fastest pace in more than a year last quarter, even as finer details of the economic data support the case for the central bank to go slow on monetary policy tightening.
Gross domestic product rose 4.5% in July-September from a year ago, the National Economic and Social Development Council said Monday, matching the median estimate in a Bloomberg survey. Compared with the previous three months, output expanded 1.2%, beating expectations for a 0.8% increase.
That performance lifts expansion in the first nine months of the year to 3.1% — a pace that will see Thailand trailing neighbors in Southeast Asia. Its position as a regional laggard in GDP expansion will likely goad the Bank of Thailand to stick with its gradual approach to raising interest rates to tame inflation.
Government spending and investment decreased during the quarter, while private consumption increased. Goods, services exports growth quickened 9.5% year-on-year, compared with 8.5% in the previous quarter, data showed.
The baht weakened 0.5% to 36.02 per dollar as of 10:15 a.m. in Bangkok. The currency, which has fallen more than 6% against the US dollar so far this year, is supporting post-pandemic tourism recovery.
The cheaper baht is adding to the appeal of the country as a value for money destination.
Overseas tourism makes up some 12% of the economy, while the travel sector as a whole accounts for a fifth of jobs. Arrivals totaled 7.56 million as of Oct. 30, with at least 1.5 million visitors a month expected during the remainder of the year, according to the government.
The economy is seen expanding 3% to 4% next year, compared with a growth rate of 3.2% this year, with the nation expected to swing back into a current-account surplus of 1.1% of GDP from an estimated shortfall of 3.6% this year, the council said.
Revenue from foreign tourist arrivals may jump to 1.2 trillion baht in 2023 from about 0.57 trillion baht this year, the council said while forecasting overseas arrivals to jump to 23.5 million from 10.2 million seen this year.
–With assistance from Tomoko Sato, Pathom Sangwongwanich, Cecilia Yap and Patpicha Tanakasempipat.
(Updates with details from the fourth paragraph.)
