Thailand's economic growth is projected at 3.3% this year and 3.7% in 2024 as a recovery in tourism and private consumption help offset a slowdown in exports, according to the Asian Development Bank (ADB).
The Asian Development Outlook April 2023 report indicated the easing of travel restrictions and reopening of borders would drive the economy to grow faster this year and next, from an expansion of 2.6% and 1.5% in 2022 and 2021, respectively.
Thailand and the Asia-Pacific region are set to benefit from the continued easing of pandemic restrictions that should boost consumption, tourism and investment, noted the report.
The Manila-based bank projects regional GDP to surge 4.8% this year and next year, improving from 4.2% reported in 2022.
"Prospects for economies in Asia and the Pacific are brighter, poised for a strong recovery as we return to normalisation following the pandemic," said ADB chief economist Albert Park.
"People are starting to travel again for leisure and work, and economic activities are gathering pace."
Abdul Abiad, director of the Regional Cooperation Department at the bank, said tourism rebounded strongly across the region last year and is on track to return to pre-pandemic levels in most sub-regions this year, partially thanks to the reopening of China.
The growth of Thailand's service sector is projected to pick up by 9.4% and 9.7% this year and next, mainly attributed to the return of tourists from China, said the ADB.
In addition, the number of foreign arrivals entering Thailand is estimated at 28 million this year and 35 million in 2024, approaching the tally of 39.8 million in 2019.
Exports of goods and services in 2023 and 2024 are expected to moderate, growing 6.6% and 6.3%, respectively, from 6.8% last year, attributed to a global economic slowdown this year and the baht's appreciation.
Merchandise exports are projected to recover next year as the global economy improves, noted the report.
Private investment is expected to continue growing this year and next by 2.5% and 3.5%, respectively, said the ADB.
This year, most investment will be in the service sector to serve rising demand, while investment in manufacturing should rise with the support of the government next year, noted the report.
The report found downside risks persist as the tourism recovery could increase demand-side inflationary pressures and the prices of tourism-related goods and services, including food prices.
Headline inflation is expected to decline by 2.9% this year from 2022, noted the report.
"Because many challenges remain, regional governments need to focus on policies that support stronger cooperation and integration to promote trade, investment, productivity and resilience," said Mr Park.