Delayed Government Formation Affects Confidence, Says BoT

Leaders of eight parties shake hand in Bangkok, Thailand, Wednesday, May 17, 2023. / Khaosod Photo

The Thai economy improved slightly in the second quarter, driven by tourism and durian exports to China, but delayed government formation raises confidence concerns.

According to the Bank of Thailand (BoT), Thailand’s overall economic performance improved slightly in second quarter of 2023 compared to the previous quarter. The number of foreign tourists increased to 6.4 million, leading to an expansion of the service sector and private consumption.

bank of thailand
photo by Matichon

However, Chayawadee Chai-anant, the Bank of Thailand’s spokesperson, warned on July 31 that the delayed formation of a new government could potentially impact confidence levels. While regular budget expenditures are proceeding as planned, there could be delays in capital expenditure, which could affect budget disbursements.

In June, Thailand hosted about 2.24 million Thai and foreign tourists, especially from Malaysia and China. The tourism sector is expected to continue its recovery and play an important role as a driver of economic growth, as evidenced by the high search volume for air travel and accommodation in Thailand by foreign users.


economy june2023 1
Both Thai and foreign tourists visited Chiang Mai during the long holiday.

There was a negative growth rate of 5.6 percent in exports in June. Various risks, such as the global economic slowdown, China’s slower-than-expected recovery and other factors, need to be closely monitored. Therefore, export performance is not expected to return to positive growth in July.

The main export product with increasing performance was agricultural products, mainly durian from southern Thailand to China. In the first half of 2023, China imported 600,690 tons of Thai durian, up 20 percent from the same period last year.

durian korat
In the first half of 2023, China imported 600,690 tons of Thai durian.