Thailand economy

Tourist rush bolsters outlook for Thai economy and currency

(Bloomberg) – Foreign tourist arrivals in Thailand are expected to exceed official forecasts with the lifting of pandemic-era restrictions, a rare positive for the country’s Covid-battered economy and currency.

International arrivals will total 9.3 million this year, government spokesman Thanakorn Wangboonkongchana said on Wednesday, citing a tourism ministry forecast. This is 55% more than the Bank of Thailand’s estimate of 6 million earlier this month and 7 million forecast by the National Council for Economic and Social Development.

Expectations of arrivals tripling to 7.2 million in the second half, from an estimated 2.1 million in the first six months, drove the baht’s gains to 0.6% against the dollar, the fourth consecutive day of ‘advance.

Holidaymakers are returning to Thailand in large numbers as global travel demand rebounds alongside a drop in new Covid cases and the lifting of quarantines in most tourist destinations. The rush could gain momentum with the Southeast Asian nation ending a pre-travel registration and insurance requirement from July 1.

Southeast Asia’s second-largest economy is betting on a tourism boost to boost growth amid growing headwinds from soaring oil prices and accelerating inflation. China’s decision to reduce the quarantine period for incoming travelers is also fueling optimism that visitors to Thailand’s biggest tourist market will return before the Covid-19 pandemic.

“There is huge pent-up demand for international travel after more than two years of the pandemic,” said Tawatchai Asawapornchai, deputy managing director of ASL Securities Co. “The easing of travel in China offered another positive news, but it will take some time for a large number of Chinese visitors to come.

Relaxations in cross-border travel, a weak baht and pent-up travel demand will continue to bolster Thailand’s tourism outlook, Thanakorn said in a statement. Arrivals are expected to reach 24 million, or around 60% of pre-pandemic levels, by 2024, the World Bank said in a report on Wednesday.

Before the pandemic, the overall tourism-related sector accounted for about a fifth of Thailand’s economy and jobs, with nearly 40 million foreign visitors in 2019, according to the central bank. Chinese tourists made up nearly 30% of that total, according to official data.

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