Thailand’s economy is recovering gradually but is stronger than that of many countries, the central bank governor said yesterday, amid concerns that a year of mourning for revered King Bhumibol Adulaydej could affect tourism and consumption.
“Although the Thai economy today is recovering gradually, it is more stable than many other industrialised and emerging countries because it has good buffers,” Bank of Thailand governor Veerathai Santiprabhob told an economic seminar.
Thai growth has been slow for years, due to weak exports and domestic demand.
Tourism accounts for about 10% of Thailand’s economic output and has been a rare bright spot.
The central bank has forecast Southeast Asia’s second-largest economy will grow 3.2% this year and again in 2017.
Last year’s growth was 2.8%.
King Bhumibol died on October 13 at age 88.
He was the world’s longest reigning monarch.
Veerathai said the central bank would ensure that the Thai financial market supports the economy during the “transition” to a new monarch.
The government has reassured on a smooth royal succession, and said that the king’s death would not upend plans for a return to democratic rule, which include a general election in late 2017.
Investors still have confidence in Thailand, Veerathai said.
“Our financial and capital markets have returned to stability very quickly, reflecting Thailand’s strong economic and financial fundamentals,” he said.
“That also reflected that both Thai and foreign investors are still confident in Thailand’s economic fundamentals. The exchange rates are also stable at the moment,” he said.
However, some businesses, such as entertainment, could be affected, and the central bank will closely monitor, Veerathai said. “But investment should not slow as much,” he said.
The government has announced a year of mourning, and is urging people to curtail festivities during the first 30 days after the king’s death.
Bangkok’s bustling bars and the country’s famous holiday resorts could go unusually quiet.
The number of foreign arrivals at five main airports during October 13-19 was 397,452, or 10,561 fewer than in the previous week, Department of Tourism data showed.
Tropical Thailand, with its beaches, Buddhist temples and infamous night life, had been expecting a record of 33mn visitors this year.