The Thai economy will continue to recover from last year but is yet to reach its pre-Covid level. In 2022, economic growth is expected to be 3.0-3.5%, against 0.8% last year and -6.1% in 2020.
However, this growth rate still does not put the Thai economy back to its value in 2019. The value of the Thai economy or its gross domestic product (GDP) is forecast to reach its 2019 level in 2023.
The government forecasts that Thailand’s public debt will reach 62% of GDP in 2022.
According to Finance Minister Arkhom Termpittayapaisith, the country’s public debt could reach 62% if the government borrows two sets of loans to rejuvenate the country’s economy. This prediction assumes the government borrows 500 billion baht under the second emergency loan decree and another 700 billion baht in the fiscal year 2022 to cover the budget deficit.
Economic growth this year will be led by the recovery of business activities and purchasing power, provided there are no extended lockdowns from the pandemic. Consumption spending is expected to grow more than last year. Due to the gradual recovery and uncertainty related to future income as the pandemic persists throughout 2022, the value of spending will not return to its pre-Covid level until next year.
The country’s public debt increased from 6.9 trillion baht (41.0 per cent of GDP) in 2019 to 9.64 trillion baht (59.6 per cent of GDP) in December 2021. This is due to the government borrowing under the two emergency loan decrees during the last two years to combat the Covid-19 pandemic.
The Finance Minister noted the possibility that public debt might be lower than 62 per cent if Thailand’s economic growth increases more than 4 per cent this year. The National Economic and Social Development Council predicted economic growth in the range of 3.5-4.5 per cent. Rising demand, improved exports, higher state investment, and domestic tourism rebound were all factors in the projection.
Tourism will take another two to three years to recover to its pre-Covid level. Last year, fewer than 300,000 international tourists entered the country. The number is expected to rise to 3-4 million this year, compared to nearly 40 million in 2019. Chinese tourists, who accounted for a third of all international tourists before the pandemic, are expected to be permitted to travel overseas at the end of this year, as Beijing strictly adheres to its “Zero-Covid” policy.
The pandemic will also continue to discourage international tourists from other countries. Much fewer flights and new travel requirements will make travel more expensive. Domestic tourism, while recovering faster than international tourism, is forecast to return to its pre-Covid level next year as fears of outbreaks and uncertainty in terms of people’s income delay travel decisions. This will continue to adversely affect SMEs as well as over 400,000 workers in the tourism-related sector.
The Finance Minister added that the dispute between Russia and Ukraine will impact Thailand because both nations are important trading partners for the country, and Russian tourists have played a significant role in rejuvenating the tourism industry. However, he assures that the country will see stable growth and authorities will adjust its strategies depending on the situation.