The Finance Ministry has lowered its 2023 economic growth outlook to 3.6% from 3.8% projected earlier, on expectations of a fall in exports as global demand weakens.
Exports, a key driver of growth, are expected to drop 0.5% this year, compared with a previous forecast for a 0.4% rise, Pornchai Thiraveja, head of the ministry’s Fiscal Policy Office, told a briefing on Tuesday.
“A global slowdown is a drag on Thailand’s economic growth… and exports might not increase as thought,” he said.
The dollar value of the country’s exports in February fell by 4.7% from the same month a year ago, according to data from the Ministry of Commerce. It was the fifth consecutive month of declines, said the ministry, which now expects the first-half figure to be in the red. Official figures for March are expected later this week..
Public consumption is expected to fall 2.1% this year due to an expected delay in Thailand’s 2024 fiscal budget as the country holds an election on May 14, Mr Pornchai said.
However, growth is expected to be propped up by tourism and domestic consumption, he said.
The economy expanded 2.6% last year and the recovery has lagged that of other Southeast Asian nations, with tourism just starting to rebound last year with 11.15 million foreign arrivals.
The country is now expected to receive 29.5 million foreign tourist arrivals this year, with the steady return of Chinese visitors, versus 27.5 million projected earlier, Mr Pornchai said.
Pre-pandemic 2019 saw a record of nearly 40 million foreign tourists, who spent 1.91 trillion baht. Tourism accounted for about 12% of gross domestic product (GDP) in that year.
The baht is expected to average 33.17 per dollar this year versus a previous forecast of 32.50, with the dollar supported by US interest rate increases, fiscal policy adviser Wuttipong Jittungsakul said.
The ministry predicted average headline inflation at 2.6% this year, down from 2.8% projected earlier, and against a 24-year high of 6.08% last year.