Abstract
THAILAND
Title Page
THAILAND
STAFF REPORT FOR THE 2022 ARTICLE IV CONSULTATION— SUPPLEMENTARY INFORMATION
August 30, 2022
Prepared By
Asia and Pacific Department
This statement provides an update on macro-economic developments in Thailand since the issuance of the staff report to the Executive Board on July 21, 2022 (SM/22/193). The update does not change the thrust of the staff appraisal.
1. Real GDP expanded by 2.5 percent (y/y) in 2022Q2 from 2.3 percent in 2022Q1. On the expenditure side, private consumption and export of services have been the drivers of the expansion. On the production side, accommodation and food services (driven by the increase in international tourist arrivals), wholesale and retail trade, as well as transportation are the main the drivers of the 2022Q2 GDP growth. Boosted by the elimination of remaining COVID-19 restrictions, tourist arrivals exceeded 1 million in July (2.1 million in January-June). Annual GDP growth remains projected at 2.8 percent amidst a highly uncertain global outlook and predominantly downside risks, though a faster-than-envisaged tourism recovery could contribute to stronger growth.
Thailand: Tourist Arrivals by Year
(In thousands)
Citation: IMF Staff Country Reports 2022, 300; 10.5089/9798400218583.002.A003
Sources: Thai authorities; and Haver Analytics.Thailand: Tourist Arrivals by Year
(In thousands)
Citation: IMF Staff Country Reports 2022, 300; 10.5089/9798400218583.002.A003
Sources: Thai authorities; and Haver Analytics.Thailand: Tourist Arrivals by Year
(In thousands)
Citation: IMF Staff Country Reports 2022, 300; 10.5089/9798400218583.002.A003
Sources: Thai authorities; and Haver Analytics.2. Inflation moderated slightly to 7.6 percent in July 2022 from 7.7 percent in June (y/y). A decrease in transportation and communication prices (from 14.8 percent in June to 10.2 percent in July) is the main driver of the small deceleration in the overall CPI. Energy prices remained elevated though most price caps on fuel products were extended through end-September. Electricity prices are set to be raised by 18 percent for the September-December 2022 period. Core inflation accelerated to about 3 percent in July 2022 from 2.5 percent in June. Average annual inflation remains projected at 6.1 percent.
Inflation
(Y/y percentage change)
Citation: IMF Staff Country Reports 2022, 300; 10.5089/9798400218583.002.A003
Sources: Haver Analytics; and IMF staff calculations.Inflation
(Y/y percentage change)
Citation: IMF Staff Country Reports 2022, 300; 10.5089/9798400218583.002.A003
Sources: Haver Analytics; and IMF staff calculations.Inflation
(Y/y percentage change)
Citation: IMF Staff Country Reports 2022, 300; 10.5089/9798400218583.002.A003
Sources: Haver Analytics; and IMF staff calculations.3. Financial conditions remain favorable but volatile. After depreciating for the first seven months of the year, the Thai baht appreciated by 3.8 percent against the U.S. dollar in August (as of August 16). The NEER appreciated by 1.9 percent over the same period. Net portfolio inflows (bonds and equities) declined from around US$6 bn in 2022Q1 to US$0.7 bn in 2022Q2 as global risk sentiment was affected by the war in Ukraine. Net portfolio inflows into equities however rebounded in August supported by the ongoing recovery. Medium-term government bond yields continued to decline.
4. The Bank of Thailand (BOT) has started to normalize monetary policy. The BOT raised its policy rate by 25 basis points from 0.5 to 0.75 percent at its August 10th Monetary Policy Committee meeting. The BOT continues to closely monitor inflation dynamics, cost pass-through and inflation expectations, and communicated that it would pursue a gradual normalization of monetary as the economy continues to recover.
