Thailand's economic landscape continues to transform, driven by a remarkable surge in tourism. The latest report from the National Economic and Social Development Council (NESDC) reveals that the country's gross domestic product (GDP) has increased by 2.3% year-over-year in the second quarter of this fiscal year.
This growth represents a seasonally adjusted rise of 0.8% compared to the first quarter, marking a significant recovery when contrasted with the initial quarter, which saw a lower growth rate of 1.6%. Looking ahead, NESDC projects that Thailand's economy will expand between 2.3% and 2.8% throughout 2024, reflecting an optimistic outlook as tourism plays a pivotal role in economic revitalization.
The gradual uptick in international travel has not only bolstered the tourism sector but has also injected vibrant energy into various industries across the nation. Despite the overall positive trend, the agricultural, forestry, and fishing sectors have experienced a decline of 1.1% year-over-year in the second quarter, showcasing a disparity between different segments of the economy.
In stark contrast, the manufacturing sector demonstrated modest growth of 0.2% year-over-year. One of the brightest spots in the economy is the accommodation and food-service activities sector, which witnessed a significant expansion of 7.8% year-over-year, following a staggering 11.8% growth in the first quarter.
This growth can largely be attributed to the flourishing international tourism industry. In the second quarter, Thailand welcomed approximately 8.1 million international tourists, reaching 93.67% of pre-pandemic levels. This influx of visitors has generated tourism receipts nearing 332 billion baht, marking the twelfth consecutive quarter of increases and reflecting a year-over-year rise of 38.6%.
Despite these encouraging figures, Thailand's economic growth still lags behind other ASEAN nations, a trend that has persisted since 2021. For context, Vietnam's economy grew by 6.9% year-over-year in the second quarter, followed by growth rates of 6.3% in The Philippines and 5.9% in Malaysia. Political changes are also influencing economic policies in Thailand.
Recently, Paetongtarn Shinawatra, daughter of former Prime Minister Thaksin Shinawatra, was appointed as the new prime minister. The national government is applying pressure on the Bank of Thailand to reduce interest rates, aimed at stimulating further economic growth. Inflation rates remain under scrutiny, with Thailand's consumer price index (CPI) climbing by 0.83% year-over-year in July, falling well below the central bank's targeted range of 1% to 3%.
In response to the evolving economic landscape, the Bank of Thailand has maintained its key policy rate at 2.5% through 2024, balancing the need for economic growth while keeping inflation in check. The central bank is set to convene again on Wednesday to revisit important policy discussions..