Grungsree Research has published the latest Thailand economic analysis, which shows the economy still recovering in February 2024, mainly concentrated in the tourism sector. As a result, overall growth is still low.
The Bank of Thailand (BoT) reported an even bigger boost from activity in the services sector, which expanded in line with the tourism sector. Both the number of foreign tourists and tourism income showed a clear increase from the previous month (+20.1% and +9.3%, respectively).
Private investment and industrial production improved in some respects. Meanwhile, private consumption is stable. However, exports excluding gold fell (-2.9%) from the previous month, as government spending continued to contract in both current and capital spending. Impact of delay in preparation of Annual Budget Expenditure Act 2024
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In the first two months of 2024, the economy received important support from the tourism sector, which has more positive signs in terms of both the number of foreign tourists and income, compared to the pre-Covid period (87% and 88% respectively in the same period of 2019) China, India , visa-free measures for foreign tourists are supporting factors in many countries such as Russia, Taiwan and Kazakhstan.
However, private consumption remained relatively stable despite benefiting from short-term stimulus measures through the scheme. Easy-e-Receipt is available.
“With the continued contraction of government spending, the overall economy is expected to continue to grow at a lower level than the last quarter of last year in the first quarter. Before improving in the second quarter, government spending will return to being the driving force for the economy once the preparation of the 2024 budget law is almost complete. This is expected to take effect in early April.
A positive aspect is the move to raise the minimum wage to 400 baht for hotels and accommodation businesses of 4 stars and above in some parts of the 10 provinces with the highest income from the tourism sector from April 13. A slight increase in confidence and purchasing power for some workers.
Thailand exports challenges, misses target in first 2 months Expanded less than last year
However, the recovery of the export sector still has challenging factors. Although February's export value grew for the seventh straight month, the Commerce Department reported February's export value of $23.4 billion, a 3.6% year-on-year expansion (the market expected 4.4%), down from 10.0% in January. And excluding oil and gold-related goods, export value increased by 2.3%
Exports of important commodities such as rice (+53.6%), rubber (+31.7%), computers and equipment (+24.9%), iron, steel and materials (+18.0%) expanded, while exports of some groups contracted. Automobiles, equipment and components (-5.6%), circuit boards (-13.2%), fresh, chilled, frozen and dried fruits (-24.2%) and sugar (-34.9%).
As for the export market, it expanded in important markets such as the US, the European Union and CLMV, while exports to Japan, China and ASEAN contracted. For the two months to 2024, export value increased by 6.7%.
“Asian countries are gradually recovering following the recovery of the global manufacturing sector, although exports of many commodities. The increase in demand for electronic products will further decongest the production chain. However, the average value of Thai exports in the first 2 months was 23.0 billion dollars. This was lower than the previous year's average of $23.7 billion.
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However, we still have to follow the export in March. This is due to underlying factors of more than $28 billion. This may result in exports being negative. In addition, exports face pressure from structural issues in Thailand's weak manufacturing sector. This was reflected in the February Thai Manufacturing Managers Index, which was in the contraction area for the 7th consecutive month (<50) இருந்தது, இது உலக மற்றும் ASEAN உற்பத்தி PMI களுக்கு மாறாக உள்ளது. இது படிப்படியாக விரிவாக்க மண்டலத்தில் (> 50) has been adjusted to remain constant
“This reflects that the production of many Thai industrial sectors may lose their competitiveness. And the demand for goods in the world has not been able to adapt to the changing patterns so the export recovery this year is still uncertain. Growth is likely to be up to 2.5%.
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