Thailand economy has been flourishing slower than expected in the first half of 2022. This is due to the recovery of the tourism industry, which is the main economic contributor to the kingdom’s GDP. To get to pre-pandemic levels, the government has made new visa policies to make it easier for foreigners to visit and stay in Thailand. However, a few factors could negatively affect Thailand’s GDP growth for the rest of the year. Let’s take a closer look at Thailand’s current economic status and what we can expect in the coming months.
Thailand Economy Outlook for the First Half of 2022
Thailand’s GDP has been updated to expand at a 2.9% rate, which will be supported by private consumption and revenues from the tourism and export industries. What the country has faced is a headline inflation rate higher than in the last 14 years, and it is expected to stay at 5.2% for the rest of 2022. While exports went up to 12.7% in the first half of 2022, it is below last year’s 18.8%. This decrease is due to recent global supply chain disruptions affecting Thailand’s exporting goods.
The second half of 2022 is expected to be driven by revenues from the travel industry as most travel restrictions have ended and 5-7 million foreign tourists are expected to visit the country. To ensure this, the Tourism Authority of Thailand has proposed 2 major changes to their travel Visas which are sure to attract visitors to their famous destinations.
Tourism Industry
As arrivals hit 1.9 million visitors in the first half of 2022, the Tourism Authority of Thailand (TAT) has established the “Visit Thailand Year 2022” campaign to showcase tourism in a new light and reach the set goal of 5-7 million foreign visitors by the end of the year. This campaign goes hand in hand with the ease of travel restrictions and new Visa policies to promote spending on local hotels, airlines, recreational attractions, and medical services.
The TAT has proposed exemptions to tourism Visa fees in hopes to attract families with the logic that the money they spend on these Visas could be spent in local businesses during their trips. In this same line of thinking, they have also proposed the extension of these Visas to up to 45 days for foreign visitors to stay in the country. The implementation of this was done to follow the “workcation” trend from families who travel while still working remotely.
Visit to Stay
Thailand has long been a popular destination for foreign tourists thanks to its stunning beaches, rich culture, and friendly people. Now, the Thailand government is making it even easier for foreign visitors to stay by introducing new long-term resident Visas. The Visas will be available to those who meet certain criteria and will be valid for up to 10 years. The introduction of the Visas is part of Thailand’s goal to encourage foreign investment and attract more “high-potential” foreigners.
This Visa also allows applicants to bring along 4 dependants under their application, which is perfect for families who want to tag along. Thailand’s competitive higher education and high literacy rate (which stands at 93.77%) is attractive to families who bring along their kids, especially with the rising number of vocational training institutes. Due to its strategic location and economic power in Southeast Asia, Thailand is making it easier than ever for foreigners to live, work, and invest in the country.
Factors Affecting GDP Growth
Thailand’s economy is forecasted to grow one percent slower than it was estimated in 2021 due to recent factors slowing down the global economy. Improvement will be driven by an increase in domestic demand as well as the rise of exports to 12.7% in the first 6 months of the year. Private investment is expected to occur once the new long-term Visas go into effect and foreign visitors start arriving. Inflation is expected to stay at 5.2% in 2022 as it lowers down from June’s peak of 7.66% as the impact of rising fuel prices dissipates.
Thailand’s economic growth is expected to remain robust in the coming years, supported by strong domestic demand and ongoing efforts to improve the business environment. However, uncertainties remain, including the potential for further increases in fuel prices and interest rates, as well as the ongoing conflict in Russia and Ukraine.
The world economy has been struggling for a few years now, but for Thailand, things are looking up. With the decline in Covid-19 cases and loosened travel restrictions, Thailand is hoping to reach pre-pandemic tourism levels by boosting their most lucrative sector. This is why they are focused on projects like the“Visit Thailand Year 2022” campaign and new Visa changes coming into effect in the third quarter of 2022. With this, the Thailand government along with the Central Bank have set their cards into motion and are hoping for a prosperous end of the year.