Thailand’s economy expanded more than estimated in the first quarter as the nation benefited from a resurgence in tourism, although the outlook hinges on its ability to demonstrate political stability.
GDP grew 2.7 percent year-on-year in the three months to March, the Thai Office of the National Economic and Social Development Council (NESDC) said yesterday.
That is faster than the median 2.3 percent expansion estimated by economists in a Bloomberg survey. Output expanded 1.9 percent from the fourth quarter of last year.
Photo: AFP
While the return of tourists in the post-COVID-19-pandemic era supported first-quarter performance, the outlook depends on how smooth the transition of power is, after Sunday’s vote showed pro-democracy parties dominated the election.
With 99 percent of the votes counted, Move Forward Party and Pheu Thai Party were together projected to rack up 287 of the 500 seats in the lower house.
Even so, it is not yet clear whether the parties would be able to form a government even if early remarks from their leaders indicate a potential coalition.
In Thailand, 250 senators are appointed by the military who also get to vote for prime minister, along with the elected members of the lower house. That could determine whether the country would be politically stable, which is key to winning and keeping investor faith in the economy.
“I hope that after this election and we get a clear picture of politics and we get a clear picture of the economics numbers, the market would be more attractive,” Stock Exchange of Thailand president Pakorn Peetathawatchai said. “Once they see the recovery of all these industries, I’m quite certain that foreign funds will look at Thailand and see us as a more stable environment for investment.”
The baht advanced by the most in more than five weeks, climbing as much as 0.9 percent as election trends showed opposition parties were winning. The currency pared its gain to 0.5 percent, still keeping it among the top performers in emerging Asia this year.
Signs of an orderly formation of a new government appeared after Pheu Thai, which is linked to exiled former prime minister Thaksin Shinawatra, offered to support Move Forward’s leader, Pita Limjaroenrat, for prime minister. That follows earlier comments by Thailand’s army chief that there was “zero chance” of the Southeast Asian nation returning to a military rule in the event of post-election turmoil.
The NESDC maintained its forecast for tourist arrivals this year at 28 million.
Chinese travelers, who accounted for about 30 percent of visitors to Thailand before the pandemic, are returning again, with their numbers on course to hit 1 million a month starting in October.
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