Geopolitical strife threatens recovery

Geopolitical strife threatens recovery

Thailand's economy has recovered after the country's reopening but geopolitical conflict remains a threat, according to a senior official at the Fiscal Policy Office (FPO).

Fiscal policy adviser Wuttipong Jittungsakul said a greater number of foreign tourists visited Thailand following the country's reopening. The number of international tourist arrivals stood at 1.12 million in July, skyrocketing 6,126% year-on-year.

Most of them were from Malaysia, India, Vietnam and South Korea, he said at the FPO's press briefing on the economic situation in July.

The number of domestic tourists in the same month was 16.7 million, a sharp rise of 1,818% year-on-year.

The Tourism Authority of Thailand projected the number of foreign tourists this year at 8-10 million, which is still far below the 40 million recorded prior to the Covid-19 pandemic.

In July sales of passenger cars, which reflect private consumption, rose 15% year-on-year, while sales of motorcycles expanded 16.4%.

Exports expanded 4.3% year-on-year in July to US$23.6 billion, representing an expansion for 17 consecutive months.

Imports of capital goods fell 5.1% year-on-year, while imports of commercial cars rose 25.4%.

Headline inflation in July stood at 7.61%, while the public debt-to-GDP ratio was 61.1%.

The county's intenational reserves stood at $220 billion as of July.

The National Economic and Social Development Council (NESDC) said earlier that geopolitical tension had pressured Thai economic expansion this year. Among the ongoing geopolitical tensions are those between Russia and Ukraine, and China and Taiwan.

According to the NESDC, the economy in 2022 is projected to expand in a range of 2.7-3.2%, compared with a range of 2.5-3.5% growth it predicted in May, mainly supported by the improvement in domestic demand, the recovery of the tourism sector and the continual expansion of exports.

In this revised forecast, the figure at the upper range was downgraded to 3.2% from 3.5%.

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