Thailand’s economy grows faster than expected in Q4

Bloomberg

Thailand’s economy grew faster than expected last quarter, buoyed by rising exports and tourist arrivals, firming its recovery as it faces risks this year from inflation and Omicron variant.
Gross domestic product during October-December rose 1.9% from a year ago, the National Economic and Social
Development Council (NESDC) said. That beat the median growth estimate of 0.8% in a Bloomberg survey, and compares with the prior quarter’s revised 0.2% contraction.
The council maintained its 3.5% to 4.5% GDP expansion outlook for this year, while raising its headline inflation forecast to 1.5%-2.5%, from 0.9%-1.9% in November. Growth in 2022 will be supported by rising demand as pandemic restrictions ease and vaccinations continue, as well as a recovery in the tourism sector, government spending and external demand amid continued global growth, Danucha Pichayanan, NESDC secretary-general, said.
“The big question is if the momentum can be sustained after government stimulus measures turned out to be the key to recovery last year,” said Amonthep Chawla, head of research at CIMB Bank Thai Pcl. “The private sector should drive the recovery this year but it continues to face uncertainties from omicron, rising prices and supply disruptions. Still, easier rules for foreigner travellers should support the tourism sector and the overall economy.”
The baht reversed an earlier decline to trade up as much as 0.1% against the US dollar. While the benchmark stock index was little changed near its highest level in more than two years, the yield on 10-year government bonds held steady at around 2.15%.
As part of its “living with Covid” strategy, PM Prayuth Chan-Ocha’s government has gradually relaxed restrictions to boost the economy, which had the slowest growth in Southeast Asia last year. Rising price pressures — which last month exceeded the central bank’s inflation target for the first time since April 2021 — and the Omicron wave have raised concerns about the recovery this year. The economy grew 1.6% in 2021, rebounding from a revised 6.2% contraction in 2020.
A tourism revival may help jump-start the economy after the government reopened the country’s borders last November.