Overview
Thailand’s economy slowed down in March compared to the previous month due to declining exports, according to the Bank of Thailand. However, the service sector continued to improve from higher foreign tourist numbers. Despite the slowdown in March, the BOT expects economic activity to have improved in April and for exports to gradually pick up.
Slowdown in Exports
Thailand’s exports, a key driver of the country’s economy, declined in March compared to the previous month. The decline was due to a decrease in demand from major trading partners, including China and the United States. According to the BOT, exports of goods excluding gold fell by 5.8% YoY in March, compared with a 0.9% YoY increase in the previous month.
The decline in exports is a cause for concern, as it will likely affect the country’s economic growth in the coming months. However, the BOT expects exports to gradually pick up in the coming months due to improving demand from major trading partners and the global economic recovery.
Improvement in Service Sector
Despite the decline in exports, Thailand’s service sector continued to improve in March due to higher foreign tourist numbers. According to the BOT, tourist arrivals in March increased by 50.8% YoY, compared to a 21.3% YoY increase in the previous month.
The increase in foreign tourists is a positive sign for the country’s service sector, as it will likely increase demand for services such as accommodation, food, and entertainment. However, the ongoing COVID-19 pandemic remains a risk to the sector, as the country is currently experiencing a surge in cases and has implemented stricter measures to contain the virus.
Outlook
The BOT expects economic activity to have improved in April, as the country has continued to ease COVID-19 restrictions and the global economic recovery has gained momentum. The BOT also expects exports to gradually pick up in the coming months, driven by improving demand from major trading partners.
However, the ongoing COVID-19 pandemic remains a risk to the country’s economic recovery, particularly in the service sector. The recent surge in cases has led to the implementation of stricter measures, including lockdowns and travel restrictions, which could negatively impact the sector.
Conclusion
Thailand’s economy slowed down in March due to declining exports, but the service sector continued to improve from higher foreign tourist numbers. While the decline in exports is a cause for concern, the BOT expects economic activity to have improved in April and for exports to gradually pick up in the coming months. However, the ongoing COVID-19 pandemic remains a risk to the country’s economic recovery, particularly in the service sector.
