Thai econ boosted by tourism revival
Published on: Tuesday, November 22, 2022
By:
AFP, Bernama
Visitors take pictures of the gold-plated stupa at Wat Phra That Doi Suthep Buddhist temple in Chiang Mai, Thailand.
BANGKOK: Thailand’s economy enjoyed healthy expansion in the third quarter, officials said Monday, with the return of international tourists helping to offset persistently high inflation.Southeast Asia’s second-largest economy was battered by the pandemic, but the kingdom’s reopening earlier this year saw the service sector record an 87 percent year-on-year increase, official data showed.
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Thailand’s National Economic and Social Development Council (NESDC) recorded a 4.5 percent year-on-year rise in gross domestic product in July-September, projecting this year’s overall growth at 3.2 percent while forecasting 3.0/4.0 percent for 2023.
“The service sector continues to grow due to tourism re-opening earlier in the year,” said Danucha Pichayanan, NESDC secretary-general, adding private consumption increased nine percent.
Thailand expects to generate around 570 billion baht ($15.8 billion) in tourism revenue this year, officials said, after welcoming some 10.2 million visitors since reopening—still down from the roughly 40 million pre-pandemic. But Danucha said the signs of recovery were there, with the kingdom pinning hopes on China’s potential relaxation of its strict Covid travel rules.
“We believe that China is likely to relax travelling restrictions in the second half of next year,” he said.
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Chinese visitors had made up a huge part of the kingdom’s tourism economy and accounted for some 28 percent of all arrivals, according to Bloomberg.
Officials said they anticipated roughly 23 million tourists in 2023, predicting 1.2 trillion baht in generated revenue.
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However, the country—like many others—is still facing stubbornly high inflation, sitting just below six percent but off 14-year highs touched recently.
“Inflation, the hike in interest rates and conflicts which have affected the energy prices remain factors that are impacting several countries,” Danucha noted.
Meanwhile from Hanoi, despite global economic uncertainty, Vietnam is still attractive to foreign investment capital flow. According to the General Statistics Office (GSO), realised FDI investment in Vietnam in the first nine months of 2022 was assessed at US$15.43 billion, a 16.3pc increase over the same period last year. This is the highest level of realised FDI in 9 months for the past five years.
This figure proves a strong increase in foreign direct investment and record-breaking growth in its private sector as well as reforms that welcome international investors, have spearheaded Vietnam into one of the top-performing economies in the region.
Vietnamese Government has recently approved its 10-year National Strategy on Foreign Investment. It aims to raise the proportion of registered foreign investment flows from certain countries and territories to over 70pc in the 2021 - 2025 period and 75 percent in 2026 – 2030, to attract higher quality investments, including green manufacturing, high-tech, and digital sector.
Although green growth is a focus of Vietnam’s economy, foreign investors seeking investment opportunities in the green textile industry continue to face a lot of bottlenecks in terms of technical systems, transparent information, cleared land resource, complicated administrative procedures, and shortage of human resources post-pandemic.
While textile and garment industry is the backbone of Vietnam’s economy, the policies for industrial zone development are still not fully effective over years.
“As concerned about environmental pollution, many provinces have rejected textile and dyeing projects, causing the shortage of sufficient domestic supply of materials.
“This is the main reason why 65-70pc of raw materials are imported,” Vu Duc Giang, Chairman of Vietnam Textile and Apparel Association was quoted as saying in Industry and Trade Magazine.
Experts believe that recently signed new-generation free trade agreements, such as the EU-Vietnam Free Trade Agreement (EVFTA), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), will attract foreign investment to the garment-textile sector in the years to come.
Nam Dinh province, the cradle of Vietnam’s textile industry, is pioneering in offering incentives for investors in terms of corporate income tax, import and export tax, support for training textile workers, etc. With the favourable environment, as of 2021, Nam Dinh province was home to 123 FDI projects, with a total registered capital of US$3.7 billion, according to Vietnam’s GSO.
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