Thailand’s first quarter economic growth exceeded expectations due to a rebound in tourism, but its future outlook remains uncertain as it depends on political stability. The National Economic and Social Development Council revealed that Thailand’s GDP grew 2.8% in Q1, faster than the median 2.3% growth estimated by economists. However, the country’s political situation is in question following elections where pro-democracy parties took the lead. Both parties may need to form a coalition government, which may make or break the country’s political stability and affect investor confidence in the economy.
Tourism has been a key driver of Thailand’s Q1 growth, with the return of post-pandemic tourists supporting the economy. The NESDC’s forecast for tourist arrivals remains at 28 million for the year, and the number of Thai tourists is expected to reach 1 million per month from October.
Thailand’s political stability is crucial in attracting foreign investment, gaining investor confidence, and maintaining economic growth. The election results and subsequent coalition formation will be key to the country’s future outlook. The Bank of Thailand may continue withdrawing stimulus if GDP growth continues, alongside a recovery in the tourism sector.