Thailand’s economic growth accelerated more than expected in the first quarter as the relaxation of Covid-19 travel restrictions underpinned tourism, but the government downgraded its outlook for this year citing risks emanating from the war in Ukraine.
Gross domestic product grew 2.2 percent on a yearly basis in the first quarter, the National Economic and Social Development Council, or NESDB, said Tuesday. The pace of growth was forecast to improve to 2.1 percent from 1.8 percent in the fourth quarter.
On a quarterly basis, GDP growth eased to 1.1 percent from 1.8 percent a quarter ago.
On the expenditure-side, private final consumption expenditure grew 3.9 percent annually, accelerating from a 0.4 percent increase in the fourth quarter. Meanwhile, growth in government spending eased to 4.6 percent from 8.1 percent.
Gross fixed capital formation moved up 0.2 percent, reversing a 0.2 percent drop.
Exports and imports of goods and services expanded 12.0 percent and 6.7 percent, respectively.
The production-side breakdown showed that the annual economic growth was attributable to an increase of 4.1 percent in the agricultural sector, in line with higher yields of main crops and a 2.9 percent rise in the service sector.
The government agency downgraded its growth outlook for 2022 to 2.5 percent to 3.5 percent from the previous forecast of 3.5 percent – to 4.5 percent. Headline inflation is estimated to be in the range of 4.2 – 5.2 percent this year.
Following continued growth in the first quarter, the pace of the recovery will largely depend on how quickly tourists return now that the country has fully reopened to foreign visitors, said economists at Capital Economics.
The firm noted that even as tourism rebounds, other headwinds are growing. The surge in oil prices are weighing on purchasing power of consumers. Moreover, exports are set to be weakened by slower global growth.