CHIANG MAI: The economy in northern Thailand slowed in the second quarter, marking a slight decrease from Q1 due to the high cost of living and lack of economic stimulus programmes, said Pornvipa Tangcharoenmonkong, the Northern Office director of the Bank of Thailand (BoT).
She said all sectors of the northern region’s economy were experiencing a downturn – except the tourism industry.
Ms Pornvipa said this has kept growing, as evidenced by the increasing number of Thai and foreign tourists, especially during festivals and long holidays. Some airlines and transport companies have expanded their services to meet the higher tourist demand, resulting in higher hotel occupancy rates in the North.
However, the office also found higher prices of some farm products such as rice, lychees and pineapples due to higher demand but lower supply, an effect of the recent El Nino phenomenon – which has resulted in less water for cultivation being available than in the previous year – and unstable weather, Ms Pornvipa said.
In the industrial sector, sales of canned fruits and vegetables fell due to trading partners still having the products in stock. But exports of fresh fruits like durian and mangosteen to China have grown, as have sales of consumer goods and construction materials to Laos and Myanmar.
Consumers’ confidence has also fallen due to the higher cost of living, making people more cautious about their spending. In addition, banks have become more careful when granting loans to customers.
According to a projection from the BoT’s Northern office, the economy will continue to slow down until the third quarter due to the high cost of living and energy costs. Tourism will continue to be one of the brighter spots in the third quarter, she added.