Thai GDP in Q4/2021 expaned stronger than expected following export and domestic demand recovery, with further boosts from easing containment curbs and economic stimulus packages launched during the year-end.
Thai GDP in Q4/2021 expaned stronger than expected following export and domestic demand recovery ...
The Thai economy returned to growth in Q4/21.
During the last quarter of 2021, the Thai economy started to recover from the delta outbreak. Thailand’s economic grew by 1.9% in Q4/2021 compared with the same period last year. In terms of quarter-on-quarter figure, growth returned to 1.8%QOQ sa (seasonally adjusted) in Q4/21, as the casualties from the delta outbreak eased from the previous quarter. As such, the Thai economy grew by 1.6% in 2021, exceeding forecasts from higher-than-anticipated demand for goods and services, as well as easing coronavirus curbs and recovering tourism and export conditions in late 2021.
Uneven recovery across different economic sectors.
Nevertheless, recovery from COVID-19 casualties remained uneven across different sectors in Thailand. In 2021, although the Thai economy managed to rebound from the major outbreak experienced during mid-2021, the recovery remained gradual due to economic scars from high household debt levels and slow labor market recovery. Economic sectors that recovered and performed better compared with pre-COVID-19 levels included exports and public consumption. Meanwhile, activities in the banking and construction sector also improved to levels higher than before the outbreak. However, the recovery in many other sectors remained at a slower pace compared with before the outbreak, in particular, the recovery of the tourism, accommodations, and restaurants sectors.
The pace of Thailand’s economic growth should accelerate in 2022.
In 2022, EIC views that Thailand’s economic growth should accelerate from the previous forecast of 3.2% following the continual recovery of domestic and external demand. Headwinds from the Omicron COVID-19 spread and inflationary pressures should slow domestic spending, especially private consumption, during the first half of the year. However, the overall economy should continue to recover following better tourism conditions during the second half of the year. Moreover, merchandise exports should continue to be one of the main economic growth drivers for Thailand.
