Limited tourism, exports expansion to dampen GDP growth next year
THAILAND’S ECONOMIC growth next year will face challenges from the limited capacity for further expansion of the tourism sector and the ongoing slower path of the export sector
KResearch yesterday revised upwards its forecast for growth of the country’s gross domestic product this year to 3.3 per cent from 3 per cent, based on expansion of tourism business and private consumption, with the latter having been driven by government measures.
Tourism revenue this year is expected to increase by 10.4 per cent, while the number of inbound tourists is predicted to reach 33 million – some 9 million of them Chinese visitors.
However, the sector next year is expected by KResearch to grow in a range of only 3-6 per cent because of the matured growth of tourists from China and the high base for tourism income this year, contributing to GDP expansion of no more than 3.3 per cent in 2017, deputy managing director Pimonwan Mahujchariyawong said yesterday.
With the number of Chinese visitors to Thailand likely to reach 9 million this year, from 7 million in 2015, there is a challenge to expand tourism further in the next phase, she said.
Meanwhile, the government’s management of Chinese zero-dollar tours will in the view of KResearch have only a limited impact, as the estimated value of such tours is only Bt3.8 billion, representing 0.1 per cent of Thailand’s GDP, she added.
The tourism sector contributes 15 per cent to GDP, while the export sector accounts for 70 per cent.
The export sector remains under pressure from continuing sluggish global economic growth, Pimonwan
said, adding that a major new challenge to Thailand’s exports in the next phase would be weak volume shipments to CLMV markets.
Thailand last year was the second-largest exporter to the CLMV area, behind China, but its ranking is expected to slip this year because Thai shipments in the first seven months plunged 4.3 per cent year on year, against growth of 7.7 per cent last year.
Malaysia has become the key rival to Thailand in exporting to CLMV markets, enjoying growth of 24.8 per cent during the first seven months, compared with just 0.6-per-cent expansion last year, she said. The CLMV area accounts for 10 per cent of Thai exports, and the decline in shipments to the four neighbouring markets has dragged the Kingdom’s overall exports down by 0.3 per cent, she added.
One significant factor that has influenced the drop-off in exports to CLMV markets is that many Thai companies have moved their production plants to CLMV countries to save on logistics costs.
“Cement and food-and-beverage firms are outstanding examples of this,” Pimonwan said.
KResearch expects overall Thai exports to grow by around 0.8 per cent next year.
