The economy returned to growth in the fourth quarter of 2021, rebounding more quickly than expected on robust exports and a recovery in domestic activity. This followed an easing of coronavirus curbs and came as borders reopened to foreign visitors.
The government maintained its economic growth outlook at 3.5-4.5%, counting on a limited impact from the Omicron-driven coronavirus outbreak, stronger domestic demand, a recovery in tourism and continued support from exports and public investment.
In 2021, the economy grew 1.6% after a 6.1% contraction in 2020.
Data from the National Economic and Social Development Council showed it expanded a seasonally adjusted 1.8% in the December quarter from the previous three months, outstripping a forecast 1.4% increase in a Reuters poll, and after a revised seasonally adjusted 0.9% contraction in the third quarter.
From a year earlier, gross domestic product (GDP) grew 1.9% in October-December, beating a forecast 0.7% rise, and against a revised 0.2% contraction in the previous three months
The government also resumed a quarantine waiver for foreign tourists this month to help its vital tourism sector, which normally accounts for about 12% of GDP.
Exports, a key driver of growth, jumped 21.3% in the December quarter from a year earlier while private consumption rose 0.3%. There were about 340,000 foreign tourists in the fourth quarter of 2021, up from 45,000 in the previous three months.
The state planning agency expects 5.5 million tourists in 2022, up from a forecast of 5 million in November.
“We expect the strong improvement in merchandise exports would help the economy to slowly return to expansion in the fourth quarter,” said Charnon Boonnuch, an economist at Nomura.
Still, growth is yet to return to pre-pandemic levels and the recovery remains fragile, with the spread of the Omicron coronavirus variant weighing on the tourism industry.