Thailand is considering accelerating the reopening of nightclubs after the outbreak has eased. Image Credit: Shutterstock

Bangkok: The Thai economy is set to expand as much as 1.2 per cent this year with the reopening of its key tourism sector, exceeding the Finance Ministry’s earlier forecast of 1 per cent.

The country’s nationwide reopening to vaccinated visitors that started this month boosted economic activities in the fourth quarter, said Finance Minister Arkhom Termpittayapaisith, adding that next year’s growth could reach as much as 4.5 per cent, exceeding the ministry’s earlier forecast of 4 per cent.

Arkhom’s new growth estimates for 2021 and 2022 are in line with the latest forecasts from the National Economic and Social Development Council. However, they far exceed the central bank’s prediction for growth of 0.7 per cent this year, and 3.9 per cent in the subsequent 12 months.

The Southeast Asian nation, popular among tourists for its Bangkok nightlife and beach resorts along the coast of Andaman Sea, has seen a decline in COVID-19 infections and hospitalisations as vaccination rates rise.

Shift in monetary policies

The central bank is also resisting pressure to raise interest rates from increased government spending, fuel prices and inflation, the minister said, with the Bank of Thailand still keeping an accommodative monetary policy. Fiscal and monetary policies will continue to be synchronised to support economic recovery, he added.

The number of active cases has fallen to 87,271 on Sunday, the lowest since July 11, while the average daily infection rate has dropped to 6,600 cases this week from a peak of more than 20,000, Health Ministry data showed. About 54 per cent of the population has received two vaccine doses.

Economic recovery

With an expected global economic recovery in 2022 and a stronger grip on the outbreak, Arkhom said that the government’s steps to support growth include measures to boost consumption, exports, private investment, public spending and the recovery of businesses. The government’s spending to support the economy so far amounts to the equivalent of 14.6 per cent of GDP.

The government aims to manage economic shocks by driving growth in every sector, he said. It’s also trying to avoid twin deficits in its budget and current accounts, and encouraging Thais to travel abroad to keep the exchange rate at an appropriate level, the minister said.

Thailand plans to add more nations to its current list of 63 territories eligible for quarantine-free travel from December to boost the tourism-reliant economy. It’s also considering accelerating the reopening of nightclubs after the outbreak has eased.