Economic Forecast and Policy Update

GDP Growth

• 2021 Forecast: Originally 0.7%, potential upside due to mild third-quarter lockdown impact.
• 2022 Forecast: Initially 3.9%, uncertainty due to omicron variant and tourism impact.
  • Next forecast release date: December 22nd, with the next monetary policy report.

Tourism Impact

• 2021: Expected 200,000 foreign arrivals, a significant drop from 40 million pre-pandemic.
• 2022: Forecast of 6 million foreign arrivals, omicron adds uncertainty.
• Importance: Tourism is crucial for employment and income in Thailand.

Federal Reserve and Policy Impacts

• Fed likely to speed up tapering and possible rate hikes.
• Stronger dollar vs. weaker baht: Thailand’s rate policy primarily driven by domestic inflation and growth, not Fed actions.
• Thailand has strong external buffers (high reserves, low external debt).
• China's impact: Economic growth more critical than financial market movements.
  • Importance of Chinese tourists to Thailand’s economy.

Domestic Economic Indicators

• Negative real rates monitored due to concerns about household debt (from 80% to 90% of GDP).
• Loan growth has been positive, approx. 4-5% year-on-year, concentrated more in corporate and household sectors.

Recovery Projections

• GDP expected to return to pre-pandemic levels by Q1 2023.
• Employment and income recovery will lag, heavily dependent on tourism revival.

Policy Outlook

• Decisions will be based on growth, inflation, and financial stability considerations.
• Current focus: Ensuring robust growth recovery and monitoring inflation within the target range (1-3%).
• Potential adjustments considering global inflation spillovers and local economic conditions.