Thailand’s economy is poised for growth in 2023, as the country’s finance ministry maintains its GDP growth outlook for the year at 3.8%. Meanwhile, in the wake of China’s reopening, the ministry has raised its foreign tourist forecast to 27.5 million, up from 21.5 million.
Despite a slowdown in exports, the recovery of the tourism sector is expected to drive domestic demand and contribute significantly to the economy. Meanwhile, the Thai real estate market is expected to see a resurgence, with major developers such making big bets on the market. Housing prices are set to increase by 5-10% over the year due to a labor shortage and rising construction.
According to Pornchai Thiraveja, head of the finance ministry’s fiscal policy office, the Thai economy is returning to pre-COVID levels and will only require fiscal measures as necessary. The country is expected to receive 27.5 million foreign arrivals this year, up from the previous forecast of 21.5 million, driven largely by China’s reopening.
The government is hoping to see at least 5 million Chinese visitors this year, which would be roughly half the figure seen in pre-pandemic 2019.
Exports, another key driver of the Thai economy, are expected to increase by 0.4% this year, down from a previous projection of 2.5%, due to the global slowdown. Despite this, the baht is expected to average 32.5 per dollar this year, as Thailand is among the countries that are expected to have a continued economic recovery.
Inflation is expected to ease, with average headline inflation forecast at 2.8% this year, down from the 24-year high of 6.08% seen in 2022.
Developers are taking note of these positive developments in Thailand’s economy. Two major developers, Noble & Supalai, have announced significant investments in Thai real estate as they bet on a market resurgence in 2023.
They make the moves as Bangkok becomes a key market in global luxury real estate. It’s not just cryptocurrency investors and digital nomads considering Thailand. Affluent Chinese buyers are discussing moves to Thailand for a better quality of life, with the benefits of emigrating to the country, including cheap international schools, a slower pace of life, and affordable healthcare.
Conclusion
Thailand’s economy is expected to grow at 3.8% in 2023 as the finance ministry maintains its GDP growth outlook for the year. The recovery of the tourism sector, driven by a forecast of 27.5 million foreign tourists (up from 21.5 million) is expected to drive domestic demand and contribute significantly to the economy. Meanwhile, the real estate market is expected to see a resurgence with a predicted 5-10% increase in housing prices. Exports are expected to increase by 0.4%, but the baht is expected to average 32.5 per dollar.
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