The economy continued to recover in December, boosted by increased tourism and domestic consumption, while exports were affected by the slowing economies of trading partners, the Bank of Thailand said on Tuesday.
Economic activity was likely to improve steadily as the vital tourism sector gained momentum, the central bank said in a statement, adding it would monitor the global economy, costs and China’s reopening.
Last week, the BoT raised its projections for foreign tourist arrivals to 25.5 million this year and 34 million next year, up from 22 million and 31.5 million, respectively. The country received a record of nearly 40 million visitors in pre-pandemic 2019.
China’s reopening is expected to further boost tourism, with the government predicting at least 5 million Chinese visitors this year, about half of the 2019 figure.
The country recorded a current account surplus of $1.1 billion in December, after a deficit of $400 million in the previous month, the BoT said.
However, the value of exports, a key driver of growth, dropped 12.9% year-on-year in December amid weaker demand in some key markets. The value of merchandise exports, excluding gold and after seasonal adjustment, increased slightly from the previous month but also contracted on a year-on-year basis.
Private consumption indicators, after seasonal adjustment, increased from the previous month, mainly from spending in the service sector on the back of increasing foreign tourist arrivals, the central bank said.
“Several fundamental factors supporting household consumption continued to improve, especially in employment and consumer confidence. Nevertheless, elevated living costs as well as a slowdown in farm income growth in some regions still weighed on private consumption,” it added.
Private investment indicators decreased from the previous month in all categories. Lower investment in machinery and equipment was in line with the slowdown in manufacturing production, the central bank said.