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20 Feb 2023

Thai Economy

Thai economy grew less than expected in 4Q22. KResearch, however, maintains our 2023 growth forecast for the Thai economy at 3.7% (Business Brief No.3992)


        The Thai economy grew less than expected at 1.4 percent YoY in 4Q22, causing the Thai economy in 2022 to expand at only 2.6 percent YoY, which is lower than our prior estimate of 3.2 percent YoY. Thailand's 4Q22 GDP was pressured primarily by the 10.5 percent YoY contraction in merchandise exports due to the slowing global economy. Additionally, there was a significant shrinkage in public consumption while public investment grew less than expected as spending and investment related to COVID fell sharply. Moreover, although budgetary disbursements were higher than those reported for 3Q22, they were still less than those seen during 4Q21. Nevertheless, steady recovery in tourism helped bolster exports in the service sector to 94.6 percent YoY. The recovery in tourism was a boon to employment, helping boost private consumption to 5.7 percent YoY in 4Q22 although it fell from the 9.1 percent growth in 3Q22.
        Looking into 2023, KResearch maintains our growth forecast for the Thai economy at 3.7 percent, which is higher than the 3.2 percent, or a range of 2.7-3.7 percent growth, projected by the Office of the National Economic and Social Development Council (NESDC), because we are of the view that tourism will continue driving the economy throughout 2023 even as the global economic downturn may pressure Thai exports to contract slightly. KResearch is of the view that the global economy may not slow down as fast as previously anticipated because China’s reopening will cause the Chinese economy to grow at an accelerated rate, thus supporting the overall global trade and economy. Meanwhile, although the US economy exhibits signs of slowing down, the latest employment figures and retail sales show that the US economy remains robust. As a result, the US may not enter a technical recession sooner than anticipated.

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Thai Economy