Finance Ministry cuts 2022 GDP outlook over Ukraine war

Finance Ministry cuts 2022 GDP outlook over Ukraine war

A Ukrainian servicewoman walks at a position, as Russia's attack continues in Luhansk Region on Tuesday. The Russia-Ukraine war is a factor affecting Thailand's economic growth this year. (Reuters photo)
A Ukrainian servicewoman walks at a position, as Russia's attack continues in Luhansk Region on Tuesday. The Russia-Ukraine war is a factor affecting Thailand's economic growth this year. (Reuters photo)

The Finance Ministry on Wednesday reduced its 2022 economic growth forecast to 3.5% from a previous forecast of 4.0%, due to the impact of the Russia-Ukraine war on global growth and inflation, a ministry official said.

Southeast Asia's second-largest economy, however, will still be supported by higher domestic spending and a recovery in tourism, as well as exports, Pornchai Theeravet, head of the Fiscal Policy Office, told a news conference.

"The economy is still growing, accelerating from last year's 1.6% growth, but there remain risk factors," he said,

"The ministry is ready to take appropriate fiscal and monetary measures to ensure continued and broad-based economic recovery," he added.

The ministry now expects exports, a key driver of Thai growth, will rise 6.0% this year, up from the 3.6% previously projected, he said.

The tourism-dependent country is on track to receive 6.1 million foreign visitors this year, but below the 7 million projected earlier due partly to the impact of the Ukraine conflict on Russian tourist numbers and China's travel restrictions.

The predicted tourist numbers would be far short of the nearly 40 million visitors during 2019, but a substantial improvement on the 428,000 foreign tourist arrivals in 2021.

From May 1, Thailand will scrap a mandatory pre-departure Covid-19 test for visitors in a bid to revive an industry that generally accounts for about 12% of gross domestic product.

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