Tourism saved Thailand as other sectors of the economy weakened
Thailand needs to bank on its tourism sector to revive the economy as exports, manufacturing and business confidence weaken.
The decline in exports and production affects the entire economy, while the recovery of the foreign tourism sector remains a slow and steady process.
Danucha Pichayanan, secretary general of the National Economic and Social Development Council (NESDC), the government’s main economic body, has urged ministers to ease and make visa arrangements for foreign tourists more convenient.
It is true that Thai visa applications in Europe are not really user-friendly, embassies require a lot of documents and apply the purchase of plane tickets and hotel reservations, sometimes wasting the applicants’ time by announcing visa rejection at the last minute. and money.
Currently, it is better to come without a visa, which gives the right to stay for 45 days, which can be extended, and for people who want to stay longer, it is easier to apply for a Thai visa in a neighboring country, which is simpler.
See also: Thailand plans to extend visa-on-arrival by 45 days until year-end
Danucha also promoted the legalization of medical marijuana in the kingdom to boost the slow recovery of the important foreign tourism sector.
He made the remarks as Thai exports slumped and the chairman of the Federation of Thai Industries (FTI) revealed this week that business confidence fell in December for the first time in seven months.
The confidence index of the country’s industrialists fell due to the decrease in production.
The head of the FTI has issued a stern warning to the government that confidence in the manufacturing sector fell for the first time in seven months in the country’s industrial confidence index for December.
Mr. Kriengkrai Thiennukul also expressed concern over the number of days off in the coming weeks, which could further affect manufacturing and output, which could contribute to lower GDP growth.
Act against a 20% increase in electricity costs and to stabilize the baht.
The industry leader again raised concerns with the government about his organization’s nearly 20% increase in electricity costs in January, as well as the gradual increase in interest rates or borrowing costs expected to occur next year.
Bank of Thailand set the stage with small increases after keeping the country’s borrowing costs lower than peers in Southeast Asia last year and well below the United States, where borrowing costs are between 4.25% and 4.5%. Only 1.25% in Thailand.
Mr. Kriengkrai also mentioned the continued high inflation in the system and expressed his concern about the increase in fees imposed by the Bank of Thailand on financial institutions to contribute to the development fund.
The tariffs add to the financial burden on Thai businesses struggling with declining exports and a highly uncertain world still rocked by the war in Ukraine and rising tensions between the United States and China, which have led to restrictions and trade embargoes. .
The reopening of China and the increase in the number of tourists is good news
The business leader was less pessimistic, pointing to growing prospects for outbound tourism with the reopening of China’s borders and a near-term drop in oil prices.
With rising oil prices fueling inflation, there are fears for the year ahead, fueled by the war in Ukraine and a planned Russian attack, China’s economy is helping boost demand, and reports show that the Petroleum Org. The Organization of the Petroleum Exporting Countries (OPEC) is set to implement plans to cut production significantly this year.
Mr. Kriengkrai also urged the government to explore all possible means to boost the kingdom’s foreign tourism prospects, while acknowledging the need to be mindful of public health.
This year, tourism will once again become an important driver of the economy, replacing exports that have started to cool down due to the global economic slowdown.
The tourism sector should accelerate the number of flights in the country.
These include controlling the outbreak in line with public health measures by stimulating the economy to avoid further lockdowns,” he said.
Thai rice is more expensive than its competitors
The Thai rice industry in particular is losing out to its competitors due to the high value of the Thai baht.
This has prompted warnings from a group of Thai exporters who fear the kingdom will miss its export target of 8 million tonnes in 2023, with just 7.5 million tonnes forecast.
On Wednesday, the Thai Exporters Association expressed concern over the rising Thai currency, which it said was driving up the price of Thai food exports on the international market.
Mr. Chookiat Ophaswongse, Honorary Chairman of the Association, suggested that the current trend in the foreign exchange market could increase the price of Thai rice by $50 per tonne for buyers, which is significant.
The Thai baht traded at 33.09 baht to the dollar on Thursday, but has risen over the past week, making Thai goods more expensive as most international goods are still settled in the currency.
Mr Chookiat said he saw no problems with supply in Thailand in the coming months, but with prices between $490 and $495 a tonne, the problem was that Thailand was losing deals with rival countries in margin negotiations due to the slightly higher price. .
He said this was despite strong foreign demand for rice and other food items at the highest prices in recent years.
He attributed the problem to the sharp appreciation of the baht.
Chookiat, despite foreign demand, customers continue to buy from other sellers because of the price.
Last year, Thailand exported 8 million tonnes of rice, while India embargoed its rice exports from its ports, fearing that demand in the densely populated country would outstrip supply.
In normal times, India is the main competitor for Thailand’s export industry in the international rice market.
Reports from reliable sources such as Bloomberg now indicate that authorities in New Delhi are considering lifting some, if not all, of the existing export restrictions on Indian rice as market prices in the giant country stabilize and stocks are sufficient to meet both market demand. and government social programs.
The development of Thailand’s economy now depends on the number of foreign tourists
Economists and analysts are still not convinced that Thailand’s economy will return to high growth, according to a Bloomberg survey on Thursday.
The survey points to a median growth forecast of 3.7% for 2023 and says the 3.2% figure recorded for 2022 could still be revised downward due to a more than expected slowdown in exports in the final two months of the year.
The forecast for 2023 is due to a doubling of foreign tourist arrivals and no slowdown this year, as well as some kind of revival in the export sector.
The lackluster performance and weaker growth in 2020 followed another anemic year for growth in 2019, when Thailand’s economy grew just 2.2% after the kingdom suffered from the effects of war. Trade between the US and China is still ongoing.
Growing challenges for Thailand’s economy
Meanwhile, the kingdom is suffering from a rapidly aging population, high private sector debt and declining foreign investment relative to investment pledges.
These issues remain another chronic problem in their own right, amid crisis and firefighting since the start of the US-China trade war in 2019 and, before that, the government’s focus on creating political stability after the 2014 coup.
Krungthai Compass, the research arm of Krungthai Bank, last week forecast a total of 22.5 million foreign tourists in 2023, including 4.8 million Chinese visitors.
Danucha Pichayanan, secretary general of the Kingdom’s National Economic and Social Development Council (NESDC), expressed concern on Thursday about the current trend in Thai exports, despite recent confidence expressed by the National Council of Thai Shippers, which plans to increase exports. 1-2% in 2023.
The NESDC will meet on February 17 to discuss the economic outlook
Danucha said his body will review the country’s economy and expects GDP figures on February 17.
The chief economic planner has urged the government to take a more positive approach to potential foreign tourists by easing visa requirements and highlighting the recent legalization of medical marijuana in Thailand, boosting the current forecast for foreign tourists in 2023, which is just over half. from 2019.
The slow recovery of Thailand’s overseas tourism industry is starting to worry planners, especially in 2023, when the kingdom is more vulnerable with exports and manufacturing under pressure due to the global economic slowdown affecting economies around the world.
Japan’s Nomura Holdings, a prominent global investment bank, also raised concerns this week despite assurances from the Treasury’s Office of Fiscal Policy that public investment spending on infrastructure projects would accelerate.
He said there was a risk that the government would become more cautious in spending, especially in the context of weaker economic growth and lower tax revenues.
The bank also warned that the results of the 2023 general elections, set for May 7, could lead to a period of political crisis.
Source: Thai Examiner