Thailand's economy in the 1st half of 2022

Thailand is renowned for its resilient economy. The Land of Smiles is ASEAN's second-largest economy, with strong growth thanks in particular to the stability of its currency since the 1997 crisis, and an economy that is over 60% export-oriented.

Thai economy to rebound in 2022

Investors planning to buyreal estate in Thailand are taking a keen interest in the country’s economic prospects over the next few years.

At the start of 2022, the Land of Smiles has managed to achieve a rebound in the tourism sector, thanks in particular to strong domestic demand and the more forthright lifting of COVID-related restrictions.

Thailand’s economic growth is forecast at between 2.5% and 3.5% for the year 2022, supported mainly by domestic demand, the gradual recovery of international tourism and the continued performance of exports.

Indeed, the Thai economy does not rely solely on tourism: exports will account for 58% of its GDP in 2021. These include manufactured goods, electronics, automobiles, machinery and equipment, and food. It’s this export-oriented economy that enables Thailand to remain competitive in times of crisis, despite the drop in tourist numbers.

Government plans also contribute to the country’s dynamism. For 2022, 4 main objectives have been defined:

1. Maintain household spending

2. Promote the recovery of the tourism industry

3. Promote exports to key markets and expand into new markets

4. Stimulate private investment, particularly in the Eastern Economic Corridor (a large industrial/new technology development zone between Bangkok and Pattaya).

Overcoming obstacles to growth

It goes without saying that Thailand also has to face up to the global context. Rising inflation – which reached its highest level in 14 years in June – is prompting the Bank of Thailand to normalize interest rates.

The government is implementing measures to counter the impact of the rising cost of living, including subsidies for low-income groups.

Evolution of the Thai Baht against the Euro on August 12, 2022, over the last 5 years

Chart source: https: //tradingeconomics.com/thailand/currency

With regard to its currency, the Thai banking system is resilient. Particularly in the last half of 2021, the Thai Baht has regained value against the euro, although it has depreciated against the US dollar in recent months – essentially due to the strengthening of the USD in the global economic context.

Focus on tourism in Thailand: “Turning the page on mass tourism

In June, Le Figaro published an interview with Yuthasak Supasorn, Governor of the Tourism Authority of Thailand, who takes stock of the reopening and outlines objectives for the future of tourism in Thailand.

Thailand wants to learn from COVID-19 and adapt to new travel habits… and among other things, “turn the page on mass tourism”. The aim is to raise the profile of the Land of Smiles as a high-end destination. Yuthasak Supasorn emphasizes the importance of niche segments such as wellness, honeymooners and nomadic workers.

In June 2022, tourist arrivals totaled 767,497, a steady increase since January 2022 (133,903 visitors).