Thailand Revised Its GDP Growth Lower To 3.5% Amid Weak Exports
It appears that the effects of soft exports have finally started to play catch up with Thailand's GDP. That's why the finance minister of Thailand revised the GDP growth during 2023 from 3.6% to only 3.5% with a change of -0.01%.
The tourism sector continues to bring growth to Thailand's economy, but the decline in exports far outweighs the gains from that sector. The reason for weak exports from Thailand can be attributed to weak global demand.
Thai Exports Down By 0.8%
In 2023, exports of Thailand will likely contract by 0.8%, while the earlier forecast hinted at a drop of 0.5% only. This was revealed by Pornchai Thiraveja, who heads the fiscal policy office of Thailand.
Another important factor is the budget which might get delayed by up to 6 months. The overall budget of Thailand is worth around $97.44 billion, and any delay in it will lead to a drop of 0.05% in GDP growth.
That's why a government official made it clear that the current budget will continue to remain functional for the time being. He also added that the Thai government will also continue to work in order to improve the economic conditions.
For now, an uptick in domestic consumption is supporting the Thai economy. In addition, the tourism sector is also going through a recovery which is helping the economy.
During Q1 2023, the Thai economy grew by 2.7%, while the growth was only 2.6% in Q1 2022. So that's one factor that tells us that not all is bad with Thailand's economy after all.
Just this year, the ministry is forecasting roughly 29.5 million tourists from other countries will arrive in the country. In other words, it means more business for Thailand's tourism sector which will also support the country's foreign reserves.
If we look at the inflation numbers, it is expected to hover near 1.7% in 2023 while the earlier projection was 2.6%. Just last year, the inflation in Thailand was 6.08% which was a 24-year high value.