Despite myriad challenges in the year to come, the economy is expected to maintain its growth momentum in 2023 boosted by recovering tourism, expanding private and public investment, continual gains in domestic demand and high growth in the agricultural sector.
According to Danucha Pichayanan, secretary-general of the National Economic and Social Development Council (NESDC), the agency projects the economy to expand by 3-4% (an average of 3.5%) next year, up from projected growth of 3.2% this year and a 1.5% uptick in 2021.
Tourism revenue is forecast to increase to 1.2 trillion baht from 23.5 million foreign tourist arrivals in 2023, up from 570 billion baht from 10.2 million foreign arrivals in 2022.
Private consumption expenditure, private investment and public investment in 2023 are expected to increase by 3.0%, 2.6% and 2.4%, respectively.
The export value of goods in US dollar terms is expected to eke out growth of 1% in the year to come compared with 7.5% growth in 2022, with headline inflation projected to be in the range of 2.5-3.5% and the current account to register a surplus of 1.1% of GDP.
According to Mr Danucha, Thailand is expected to face several key risk factors including volatility in the global economy and financial markets, highly uncertain geopolitical risks, new variants of Covid-19 as well as rising domestic household debt.
"For economic management in 2023, Thailand needs to prioritise retail debt amid rising interest rates for both households and small and medium-sized enterprises, support for agricultural production and farmers' income, maintaining momentum in the export sector and encouraging the business sector to appropriately manage exchange rate fluctuations," he said.
"Recovery of the tourism industry and related sectors needs to be catalysed. At the same time, private investment should be stimulated.
"Next year Thailand should aim to maintain growth momentum from public expenditure and monitor, scrutinise and prepare for volatility in the global economy and financial markets. In addition, there are highly uncertain geopolitical risks as well as new variants of Covid-19."
The NESDC reported yesterday the economy in the third quarter expanded by 4.5%, accelerating from 2.3% and 2.5% in the first and second quarters respectively.
After seasonal adjustment, the economy grew by 1.2% from the second quarter.
A positive factor for the expansion was the relaxation of Covid-19 restrictions that allowed people to return to normal lives and activities. Entrepreneurs reported higher confidence as the overall economy improved.
In addition, the full reopening of the country to international tourism and the relaxation of geopolitical tension supported growth.
On the production side, the agricultural sector decreased by 2.3%, in contrast with a rise of 4.4% in the second quarter. However, the non-agricultural sector rose by 5.0% because of the expansion in both the industrial and service sectors.
On the expenditure side, the private sector's final consumption and total investment increased significantly, although the government's final consumption expenditure contracted.
Exports and imports of goods and services increased notably.
In the first nine months of 2022, the economy grew by 3.1% from the same period last year, according to the NESDC.
The government's planning agency expects the economy to grow 3.2% this year, at the upper end of a previous forecast range of 2.7-3.2%.