Thailand’s tourism industry is experiencing a slowdown, mainly due to the impacts of the prolonged conflict in the Middle East, resulting in a 3.2% drop in arrivals in the first quarter of the year and a 2.91% drop in the first eight months of the year, compared with the same periods last year, according to Krungthai COMPASS, the research arm of Krung Thai Bank, and the Ministry of Tourism and Sports.
Krungthai COMPASS attributed Thailand’s economic slowdown to pressure from multiple factors, chief among them being the prolonged conflict in the Middle East, which has impacted global oil prices and the cost of living, coupled with uncertainty over trade tariffs imposed by the US administration and the El Niño climate phenomenon, which may have a severe impact on the Thai agricultural sector.
Several countries in Asia are expected to benefit from AI technology, which may boost their GDP, as reflected in their gross fixed investment (GFI) and industrial production (GPI) indices this year, according to the Krungthai research arm.
As far as Thailand is concerned, industrial production growth is forecast to be concentrated in the upper K-graph group, which represents the new growth engine, while the lower K-graph group will see slower growth.
The bank noted that Thailand’s tourism growth in the first quarter of this year contracted by 3.2% year-on-year, compared with South Korea’s 19.3% growth and Vietnam’s 14.9% growth.
Moreover, safety concerns pose a serious challenge to Thailand and have undermined foreign tourists’ confidence in the country, particularly Chinese tourists.
Nonetheless, Thailand remains a favourite target for foreign investors, especially in digital and AI technology, the bank said.
According to the Ministry of Tourism and Sports, 19.76 million foreign arrivals were registered in Thailand from January 1 to August 15, a 2.91% drop year-on-year.
The largest numbers were Chinese (3,330,481), Malaysians (2,496,831), Indians (1,456,696), Russians (1,140,441) and South Koreans (729,367).
Tourism revenue amounted to 957.6 billion baht.
