By Orathai Sriring
BANGKOK (Reuters) – Thailand saw slower growth of foreign tourist arrivals of 4.2% last year and the outlook for a lucrative industry is weighed by strength in the baht and China‘s new coronavirus at a time of faltering economic growth.
Tourist receipts account for about 12 percent of Southeast Asia‘s second-largest economy, making it one of the most important drivers of growth for an economy that has lagged most regional peers for years.
Foreign tourist arrivals hit a record 39.8 million last year – equivalent to more than half of Thailand’s population – after a rise of 7% to 38.2 million in 2018, when a boat accident killed dozens of Chinese tourists, tourism ministry data showed.
China‘s coronavirus has added to the concerns. Thailand on Friday confirmed its fifth case of the virus and Saturday’s start of the Lunar New Year holiday is expected to bring an influx of Chinese travelers.
“The outbreak of coronavirus is a risk. The strong Thai baht may also affect tourism growth,” said Tim Leelahaphan, economist of Standard Chartered.
“That is unlikely to help an already-slowing economy,” he said adding he expected the central bank to cut its policy rate by a quarter point in the first quarter.
The Bank of Thailand (BOT) cut the key rate twice in 2019, taking it to a record low of 1.25%. It will next review monetary policy on Feb. 5.
The BOT forecast economic growth of 2.8% this year, slightly picking up from an estimated 2.5% in 2019, a 5-year low.
(Reporting by Orathai Sriring; Editing by Alex Richardson)