Thailand’s international tourism jump to power GDP growth to 5-year high in 2023

A faster-than-expected rebound in international visitors to Thailand is putting the country’s economy on course to return to pre-pandemic growth by next year, according to the prime minister.

Southeast Asia’s second-biggest economy will expand by 4.2% in 2023, on top of forecast growth of 3.3% this year, Prime Minister Prayuth Chan-Ocha told a press briefing after the weekly Cabinet meeting. That would match the pace in both 2017 and 2018, which represent the highest over the past decade, according to data compiled by Bloomberg.

The tourism-reliant nation has eased Covid-related travel curbs, waived visa requirements and relaxed business restrictions to lure international travellers as soaring inflation has derailed the recovery in domestic consumption and investments. Thailand in June also became the first nation in Asia to de-criminalise cannabis in an effort to boost medical tourism.

About 6 million foreign visitors are expected this year — the vast majority in the latter six months. Prayuth said that number should more than triple to 19 million next year.

“We have so much optimism in our economic outlook as the rebound in international tourism has been much faster than we expected,” Prayuth said. Still, rising material costs and slowing in the global economy present “major challenges,” especially to Thai exports, he said.

Thailand’s retail inflation rate in June jumped 7.66% from a year earlier, a 14-year high, boosted by surging energy costs. For the year, the government forecasts a consumer-price jump of 6.2%. That should decelerate to 2.5% in 2023, Prayuth said.