The research office of CIMB Thai Bank (CIMBT) has upgraded its GDP projections for Thailand from 0.4% to 1.1% for this year and from 3.2% to 3.8% for next year, in line with better-than-expected third quarter economic reports.
The National Economic and Social Development Council reported the economy in the third quarter of 2021 contracted by 0.3% year on year.
Amonthep Chawla, chief economist and wealth research and advisory at the bank, said yesterday Thailand's economy is full of potential to grow, thanks to the improving outlook of the export and tourism sectors and the purchasing power of middle-upper income earners.
According to the research office, exports could grow by 4.7% next year, following a continual recovery in electronics, automobiles and parts, rubber products, petrochemical and processed food, in line with a gradual expansion of major trading partners.
It expected 5.1 million foreign tourists coming to Thailand in 2022. Tourism outlook appeared promising after the government eased regulations on travelling and quarantine. Foreign tourists next year could come from countries that would allow returned tourists coming in without being quarantined.
However, the research office does not expect Chinese tourists to reach as much as the 28% of arrivals seen in 2019 due to the delay in opening borders for tourism in China. There could be merely 9% of the expected 5.1 million tourist arrivals in 2022.
The research office projected a sharp rebound in the number of tourists by the second half of 2022, following mass vaccinations and the declining number of daily infections in Thailand and other countries.
Following an easing restrictions on economic activities and opening borders for international tourism, consumer spending would likely grow amid higher confidence. Meanwhile, support from government subsidies that is expected to continue could accelerate consumption among locals.
The research office viewed that consumer spending could rebound among middle and upper income groups during the first half of the year while purchasing power among lower middle income groups could rebound afterwards, pending on rising farm income and the higher number of international tourists by the second half of next year.
Mr Amonthep said that despite the three supporting growth factors, the economy has three downside risks -- new Covid-19 outbreaks in Thailand and among key trading partners, the ongoing trade war between the US and China and high inflation in Thailand.