Thailand’s Recovery is Firming but Risks and Structural Challenges Remain
The ASEAN+3 Macroeconomic Research Office (AMRO) published the 2022 Annual Consultation Report on Thailand, indicating that Thailand’s economy continues to grow by 2.4 percent year-on-year in 2022 and is expected to expand by 4.8 percent in 2023 because of stronger domestic consumption and tourist arrivals. In 2022, the number of international visitors to Thailand reached 11.04 million. In addition to the government’s “We travel Together” schemes which are stimulus packages to promote domestic tourism, the Bank of Thailand (BOT) imposes new measures to help SMEs and retailers recover from COVID-19 pandemics, such as long-term debt restructuring measures and provisions for NPLs.
However, Thailand’s economic recovery is facing some challenges. Firstly, global economic stagnation, because of evolving COVID-19 variants, might disrupt supply chains. Next, the strengthening U.S. dollar rates pose a risk to trade and importation. Lastly, the surge of global oil, cooking gases, and commodity prices heat inflation up, worsening lower-income and SME spending.
AMRO suggests that Thailand needs to address structural challenges to strengthen post-pandemic recovery: a rapidly aging population, digital transformation, and climate change.