ECONOMIC OVERVIEW

In Q2/2023, Thailand’s annual GDP growth slowed but picked up momentum in the third quarter. During this period, the Purchasing Managers’ Index (PMI) rose, despite a concurrent decline in interest rates. To bolster the tourism sector, the government announced an expansion of its visa exemption policy in late October, encompassing arrivals from India and Taiwan. Additionally, a plan was approved to reduce the prices of gasohol for three months, aimed at alleviating living expenses. The baht stood at THB35.89 per US Dollar on November 10th, marking a 2.4% monthly appreciation. Anticipating increased tourist arrivals, the baht’s value is expected to rise. Plans for a “Green Economy Fund” to be launched in February 2024 aim to support Thai businesses venturing into sustainable sectors. The government is targeting new markets like Saudi Arabia, South Africa, and India. Additionally, the Prime Minister suggested streamlining Value Added Tax Refunds (VAT Refunds) for departing tourists from Thailand, seeking enhanced convenience and faster processing.

INTERNATIONAL TOURISTS

According to the Ministry of Tourism and Sports, the number of international tourists entering Thailand is rising, hitting a total of over 7.2 million in Q3/2023, up by 10.1% QoQ and by 96.5% YoY which is highly positive for the next quarter. However, a full recovery remains elusive as pre-pandemic, the number of international tourists stood at over 10 million in Q4/2019. Malaysia has remained the largest group of incoming international tourists for five consecutive quarters with over 1.1 million visitors in Q3/2023, an increase of 54.7% YoY. To maintain a balance between the number of visitors from both nations, Malaysia and Thailand have encouraged a two-way tourist exchange. Tourists from China, meanwhile, which used to be the top country for tourists visiting Thailand in the pre-pandemic era, have not yet returned to their full capacity as their country’s economy is projected to expand at its slowest rate in decades. Additional technological limitations and a weakerthan-expected real estate market are China’s downside threats. Closely behind are South Korea, India, and Vietnam. While the number of Russian tourists fell by 11% QoQ.