Thai economy sees stunted growth despite tourists’ return

In this file photo taken on November 2, 2021, Buddhist monks wearing face masks walk inside the Grand Palace, a day after Thailand welcomed the first travellers vaccinated against the Covid-19 coronavirus, in Bangkok. — AFP photo

Thailand’s economy grew 2.5 per cent in the second quarter as returning foreign tourists failed to offset high inflation and concerns over regional tensions, the country’s main economic agency said Monday.

Southeast Asia’s second-largest economy was hit hard during the pandemic, though visitor numbers are slowly improving with the relaxation of travel rules since May.

But the Ukraine war and now tension over Taiwan could put any economic recovery at risk, Thailand’s National Economic and Social Development Council warned.

‘We have to continue monitoring to see how long counteraction from China over Taiwan will last,’ NESDC secretary general Danucha Pichayanan said.

‘The relaxing of our Covid controls, the recovery of tourism are factors that support the growth.’

The agency said that gross domestic product rose 2.5 per cent in April-June compared to the same period a year ago — well below the anticipated growth of three per cent.

The NESDC also revised the expected full-year growth rate from 2.5-3.5 per cent to 2.7-3.2 per cent.

Economist Charl Kengchon, from the Kasikorn Research Centre, characterized the results as a ‘mixed bag’, with the tourism boost failing to lift growth.

‘I think that is because inflation hit a 14-year high in June, so it is a drag on spending both (in the) household sector and business,’ he said.

Inflation in the month of June hit 7.7 per cent and was at 6.5 per cent for the quarter, according to the NESDC. — AFP