Economy, political volatility impact Thailand’s tourism industry

Global Business

Economy, political volatility impact Thailand's tourism industry 2

In Thailand, GDP figures announced on Monday showed better than expected growth for the first two quarters of 2016.

A much needed rise in agricultural prices, and consumer spending pushed growth to three point five percent for the second quarter, well over the three percent that had been expected. Ironically a rise in tourist spending had also contributed to the rise out after the coordinated bombings across the south of Thailand, tourism may be less robust.

CCTV’s Tony Cheng reports.

Economy, political volatility impact Thailand\'s tourism industry

Economy, political volatility impact Thailand\'s tourism industry

In Thailand, GDP figures announced on Monday showed better than expected growth for the first two quarters of 2016. A much needed rise in agricultural prices, and consumer spending pushed growth to three point five percent for the second quarter, well over the three percent that had been expected. Ironically a rise in tourist spending had also contributed to the rise out after the coordinated bombings across the south of Thailand, tourism may be less robust. CCTV’s Tony Cheng reports.

In a Hua Hin’s gallery, the picture may be looking good, but the outlook is far from rosy. This Hua Hin artist, Aourd Srisamai, depends on trade from passing tourists. But the recent bombings have cleared the streets outside the gallery.

The only passers by now are security volunteer checking for explosive devices 

“It will create an impact, which could be a lot, could be not much. But without doubt some of the tourists will be scared,” Srisamai said.

And on a busy weekend, in one of Thailand’s largest resort towns, most of the people on the beach are locals.

Tourism is incredibly important to the Thai economy, worth about seven percent of GDP, that’s more than $16 billion its estimated. But with targeted attacks like this, the tourists are starting to look elsewhere, and that could be a huge problem, especially here in the south, where tourism is the main industry.

Ironically, a rise in tourist spending had helped Thailand overcome gloomy expectations for GDP in the second quarter of 2016.

Voting And a short term boost in the markets, followed the result of last week’s referendum, which suggested a period of stability and continuity, although long term questions remain about future political instability.

But despite a crippling drought, and a massive oversupply of the country’s main crop, rice after several years of being hit by high inflation and low prices, Thai farmers are starting to see profits.

And consumer spending, which for many Thai’s has been on hold since the military coup, is now responsible for GDP growth of three point five percent in the second quarter 

“With oil prices rebounding, agricultural prices have come up quite a bit, so that helps alleviate the concern, or at least boost the confidence in consumption,” Dr.Pipat Luengnaruemitchai, Phatra Securities of PCL said.

The Thai economy is not yet out of the woods, however, the military government has shown little expertise when it comes to managing the nations finances. And exports, one of Thailand’s key indicators, remain in decline.