Q1 GDP growth tops forecast but Ukraine war hits 2022 outlook

Q1 GDP growth tops forecast but Ukraine war hits 2022 outlook

Tourism helped boost Thai economic growth in the first quarter. (Bangkok Post photo)
Tourism helped boost Thai economic growth in the first quarter. (Bangkok Post photo)

Thailand's economy grew faster than expected in the first quarter supported by a pickup in agriculture and an easing of Covid-19 curbs, but higher inflation remained a drag on a fragile recovery.

The government cut its 2022 economic growth forecast to 2.5-3.5% from 3.5-4.5%, due to higher prices and slower global growth linked to Russia's invasion of Ukraine. Last year's expansion was revised to 1.5% from 1.6%, among the slowest growth rates in the region.

The economy, Southeast Asia's second largest, expanded a seasonally adjusted 1.1% in the March quarter from the previous three months, data from the National Economic and Social Development Council showed, versus a forecast 0.9% increase in a Reuters poll.

On a yearly basis, gross domestic product (GDP) grew 2.2% in January-March, beating a forecast 2.1% rise, and after revised 1.8% growth in the previous three months.

The economy this year will be supported by increased exports, domestic demand and a recovery in tourism, NESDC head Danucha Pichayanan told a news conference.

The agency expects inflation of 4.2-5.2% this year, up from 1.5-2.5% projected previously, while exports were seen up 7.3% this year versus a 4.9% increase projected earlier

It expects 7 million foreign tourist arrivals this year, versus 5.5 million seen previously, after travel restrictions were eased to help revive the crucial sector, which normally accounts for about 12% of Thai GDP.

However, the numbers are still far below 40 million foreign tourist arrivals in 2019, before the pandemic. 

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