Thailand's economic growth slowed more than expected in the fourth quarter of 2022, as exports and manufacturing declined, but a rebound in the vital tourism sector should continue to boost the recovery this year amid weaker global demand.
Southeast Asia's second-largest economy expanded 1.4% in the October-December period from a year earlier, data from the National Economic and Social Development Council (NESDC) showed on Friday.
That compared with a forecast rise of 3.5% in a Reuters poll and revised 4.6% growth in the September quarter.
On a quarterly basis, gross domestic product (GDP) contracted a seasonally adjusted 1.5% in October-December, missing expectations for a 0.5% rise.
In 2022, the tourism-dependent economy expanded 2.6%, after growing 1.5% in the previous year, which was among the slowest growth rates in Southeast Asia.
While travel picked up, exports faltered and declined each month from October to December. Exports fell 0.7% in the fourth quarter from a year ago, while imports dropped 4.6%, according to NESDC. Private consumption rose 5.7% last quarter while government spending declined 8%.
Despite the slower fourth quarter, the economic recovery is expected to gain some traction, with China's earlier-than-expected reopening proving a further boost to the tourism sector, helping offset some of the impact of weakening exports.
“Even if other factors, especially tourism, are doing well, exports is the big drag,” NESDC secretary-general Danucha Pichayanan said on Friday.
On Friday, the NESDC predicted the economy would grow 2.7% to 3.7% this year, down from a previous forecast of 3% to 4% growth.
With the return of China's visitors, the agency now expects Thailand to receive 28 million foreign tourist arrivals this year, up from the 23.5 million projected earlier.
Thailand beat its tourism target in 2022 with 11.15 million foreign visitors. It welcomed a record of nearly 40 million visitors before the coronavirus pandemic emerged in 2019, who spent 1.91 trillion baht (US$55.75 billion).
Before the Covid-19 pandemic, about 28% of Thailand’s 40 million annual visitors were from China. Tourism typically accounts for at least 12% of the economy and a fifth of jobs while private consumption, which also benefits from travellers spending, makes up 50% of GDP.
