Tourists cross a street outside the Grand Palace in Bangkok. Despite the Bangkok bombings in August this year and the fact that the country is still being governed by the military, Thailand is welcoming more tourists than ever before. This year, expectations are that visitor numbers will hit a new record high of 30mn, an increase of 22% from last year.
By Arno Maierbrugger
Gulf Times Correspondent
In a surprise announcement, Thailand’s National Economic and Social Development Board (NESDB) — the country’s core body for setting economic development strategies — this week said that Thailand’s economic growth in the third quarter of 2015 stood at 2.9% year-on-year and 1% over the previous quarter.
This was better than the expected and the highest quarterly growth in three years, signalling a recovery from a period of sluggish economic sentiment and low consumer confidence, exports and manufacturing output since the coup d’etat in May last year.
NESDB deputy secretary-general Porametee Vimolsiri said that growth has been stimulated by higher government spending and investment, as well as tax benefits and would continue through the rest of the year. The Thai government plans to spend around $10bn during October and November this year into various stimulus measures, including infrastructure, he said, making the NESDB confident that full-year growth in 2015 will also be 2.9% and is expected to reach between 3% and 4% in 2016 as the country’s budget cycle that began in October includes a 20% year-on-year increase in public investment. That way, growth would clearly have recovered from 2% in 2013 and a meagre 0.9% in 2014.
Further measures are a planned boost in investments in “future industries,” according to Thai Deputy Prime Minister Somkid Jatusripitak who is in charge of spurring economic growth in Southeast Asia’s second-largest economy which has consistently missed government targets since the army coup. Speaking at the business event „Thailand Economic Outlook 2016” held in Bangkok on November 18, he said that the Cabinet has improved a list of ten industrial sectors seen as Thailand’s “new economic growth engines”, namely next-generation cars, smart electronics, medical and wellness tourism, agriculture and biotechnology, food, industry robotics, logistics and aviation, biofuels and biochemistry, as well as the digital and medical equipment sectors. Somkid said he will shortly embark on an international roadshow to promote foreign investment into these sectors, declaring 2016 “the year of investment” for Thailand.
An important factor contributing to growth are also rapidly rising tourism numbers. Despite the Bangkok bombings in August this year and the fact that the country is still being governed by the military, Thailand is welcoming more tourists than ever before. This year, expectations are that visitor numbers will hit a new record high of 30mn, an increase of 22% from last year. Chinese tourists are expected to total 8.1mn, rising by 75% from 2014. In 2016, visitor numbers should grow further to 32mn, Thailand’s tourism authorities predict. The sector will bring the country proceeds of estimated $70bn in 2015, up 23% from last year.
All this indicates a turnaround for the Thai economy, although exports still remain weak and are expected to fall by 5.4% this year mainly due to the economic slowdown in China. However, experts say that improvement in global conditions should support exports in the mid-term. According to Bank of Thailand Governor Wirathai Santipraphob, there was “a strong likelihood” that Thailand’s economy will see sustained growth over the coming years, even more so if it additionally manages to address the prevailing problem of high household debt.
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