Thailand Sees Economic Recovery Owing to Tourism and Consumerism

Thailand's economy showed signs of improvement in October, driven by tourism, exports, and private consumption, bolstered by government economic stimulus measures, according to the Bank of Thailand (BOT). Exports, a critical pillar of the economy, surged by 14.2% year-on-year, while imports rose by 17.1%, leading to a trade surplus of $1.4 billion. Industrial production also increased, supported by rising domestic demand and exports, excluding the automobile sector.

The country recorded a current account surplus of $0.7 billion in October, up slightly from September's $0.6 billion. Private consumption grew by 0.8% month-on-month, while private investment increased by 4.5%. Additionally, government spending saw a notable rise, contributing to the overall economic activity. Tourism, another key economic driver, provided substantial support to the service sectors, though structural challenges continued to weigh on certain businesses and household incomes.

In a surprising move, the BOT reduced its policy interest rate by 25 basis points to 2.25% during its October 16 review. It also revised its 2024 GDP growth forecast upward to 2.7% from 2.6% but slightly reduced its 2025 growth projection to 2.9% from 3.0%. The economy grew by 3% annually in the July-September quarter, marking the fastest pace in two years. However, officials and analysts have raised concerns about sustaining this momentum amid potential challenges in the upcoming year.