Thai foreign visitors seen at 40 million again in 2024

Pushing for growth: The Bank of Thailand building in Bangkok. It has left the one-day repurchase rate at a record low of 0.50% to support the virus-hit economy. — Bloomberg

BANGKOK: Thailand’s tourism-dependent economy should receive eight million foreign visitors next year and see a recovery to a pre-coronavirus pandemic level of 40 million visitors by 2024, the country’s finance minister has said.

South-East Asia’s second-largest economy contracted 6.4% in the third quarter from a year earlier after slumping 12.1% in the prior quarter, with tourism taking a hit.

The economy is expected to take two years to recover but the tourist sector should take until 2024, Finance Minister Arkhom Termpittayapaisith told a business seminar.

“If global travel gets better than expected after there is a vaccine, our tourism may come back faster, ” he added.

While Thailand has had few outbreaks and removed most restrictions, it has not lifted a travel ban imposed in April. It recently started receiving a limited number of tourists on special visas with a quarantine requirement.

Officials have forecast 6.7 million tourists this year, 6.69 of which visited in the first quarter before the ban.

The spending of the nearly 40 million foreign tourists last year accounted for at least 11% of gross domestic product.

The government will discuss later an additional boost to purchasing power, which remained weak, Arkhom said. The government’s economic task force is expected to extend subsidies for consumers.

Monetary policy must also be in step with fiscal policy to support the recovery, Arkhom said.

“Monetary policy has to remain accommodative until the economy fully recovers, ” he said, adding the central bank would deal with the strengthening of the baht.

The government plans to borrow one trillion baht (US$33bil) to help mitigate the impact of the pandemic on an economy that officials expect to contract 6% this year.

Meanwhile, Thailand’s central bank saw a need to preserve limited monetary policy room to use at the most effective time, when it kept its benchmark rate steady at a record low last month, according to minutes of its policy meeting published yesterday.

On Nov 18, the Bank of Thailand’s (BoT) monetary policy committee voted unanimously to leave the one-day repurchase rate at a record low of 0.50% for a fourth straight meeting after three cuts earlier this year to support a coronavirus-hit economy.

The committee was worried about the rapid rise in the baht, and would consider necessary measures “to ensure that the exchange rate movements would not be an obstacle to economic recovery”, the minutes said.

“The rapid appreciation of the baht would affect the fragile economic recovery through eroding profitability of exporters that would in turn affect investment and employment, ” the minutes said.

The baht traded at 30.22 per US dollar at 0345 GMT, after hitting a more than 10-month high of 30.13 last month. The BoT plans to hold a briefing on additional measures to contain the baht. — Bloomberg