The World Bank Believes Thailand’s Economy Will Grow in 2022
Thailand has struggled during the pandemic, given the country's reliance on tourism and export sectors. Fortunately, the World Bank predicts that its economy will expand in 2022. Come read our blog to learn more.
Thailand has had a rough ride during the pandemic, since the country is heavily dependent on tourism and export industries. Fortunately, the World Bank has now given the Thai economy a brighter outlook.
Growth Revival in 2022
According to the World Bank, the country’s economic activity could return to 2019 levels by the end of 2022. That would mean GDP growth of 3.9%, up from 1% in 2021.
The economy is already showing signs of recovery. There are more tourism arrivals, and progress is being made with vaccinations. Kiatipong Ariyapruchya, the World Bank's senior economist for Thailand, believes a recovering service sector could add to the recovery and bring GDP growth to 4.3% in 2023.
"If the current pace of vaccinations at around 750,000 doses per day is maintained and there is not a further resurgence of Covid-19, domestic consumer confidence and international tourist confidence are expected to strengthen," Ariyapruchya stated.
Tourism Is Critical
2021 saw very few tourist arrivals. That was partly due to travel restrictions from other countries but also because of strict quarantine requirements in Thailand.
As the rate of vaccinations is picking up, the risks for the local population are decreasing, leading the Thai government to consider a reopening. The government had already reopened the country temporarily but reintroduced the quarantine requirements after the Omicron variant had caused a spike in infections.
Currently, there are sandbox schemes in Phuket that allow tourists to get into the country. A full reopening without quarantine might be possible very soon.
Lockdown Risks
According to the World Bank, tourism could contribute two percentage points to GDP growth in 2022 and four percentage points in 2023.
However, risks can come from further lockdowns. "In case a new wave of a Covid-19 variant occurs, causing the government to use rigid containment measures or even a lockdown, the Thai economy is likely to contract by 0.3% in 2022," says Ariyapruchya. "In this event, an economic recovery is expected to be delayed by one year."
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