Krungthai Compass predicts 22.5m foreign arrivals in 2023

Krungthai Compass predicts 22.5m foreign arrivals in 2023

Tourists arrive at Suvarnabhumi airport on Jan 8. Foreign arrivals are forecast to reach 22.5 million this year. (Photo: Varuth Hirunyatheb)
Tourists arrive at Suvarnabhumi airport on Jan 8. Foreign arrivals are forecast to reach 22.5 million this year. (Photo: Varuth Hirunyatheb)

Krungthai Compass, a research unit under Krungthai Bank, expects foreign tourist arrivals in 2023 to more than double the number recorded last year, estimating it will take two years to return to the level posted in 2019.

The research house forecasts foreign arrivals this year to tally 22.5 million, up from 10.2 million expected for 2022. Of the total, Krungthai Compass anticipates 4.8 million visitors will be Chinese nationals, a 20% increase from its previous forecast of 4 million, attributed to China's reopening since Jan 8 this year, said chief economist Patcharaphot Nuntramas.

The total number of arrivals could exceed 22.5 million if Beijing relaxes its zero-Covid policy further, said the think tank.

Before the pandemic, the number of Chinese visitors to Thailand averaged 10 million per year and tourism income accounted for 20% of Thailand's GDP.

"We expect Thai tourism to continue to improve in the near future," said Mr Patcharaphot.

"Foreign arrivals should total 22.5 million this year and 32.5 million next year, nearing the 2019 tally of almost 40 million in 2025."

Thailand should face an economic transition over the next few years, shifting from its key engine of exports towards tourism, he said.

Krungthai Compass predicts the country's GDP growth rate this year will be 3.4%, rising slightly from a growth estimate of 3.2% for 2022.

The research house predicts Thai export growth this year of only 0.7%, down sharply from a 7% growth rate projection last year.

Supply chain shortages and a global economic slowdown are the key factors impeding Thai exports this year, said the researcher.

Krungthai Compass expects the US will face an economic slowdown this year, while the eurozone will enter an economic recession. The OECD predicts GDP growth for both the US and the eurozone at 0.5%.

Mr Patcharaphot said Thailand's economy should shift from low interest rates towards an upward trend starting this year.

The Bank of Thailand is expected to continue increasing its policy rate to 2% by the end of this year and to 2.5% in 2024, up from 1.25% at present, in an effort to curb the rate of inflation. The headline inflation rate this year is projected at 3.1%, above the central bank's target range of 1-3%.

The research house predicts the baht will continue to appreciate to 33-34 to the US dollar this month, then stay within a range of 33.75-36.50 baht to the greenback by the end of this year, he said.

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