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In a bid to attract more international tourists and boost its tourism industry, Thailand has taken a significant step by deciding to temporarily lift visa requirements for travellers from China and Kazakhstan.
At a cabinet meeting on September 13, 2023, the Thai government greenlit the implementation of the ‘Visa Free’ policy. This policy will grant Chinese and Kazakh tourists entry to Thailand, commencing on September 25 and extending through the end of February 2024.
“It’s a temporary waiver to see the impact. I’ve discussed this with all sectors, including security…so that they are prepared,” Thailand’s new prime minister Srettha Thavisin told reporters on Wednesday. This decision comes as Thailand, under new leadership, strives to reinvigorate its economy, having faced challenges as one of Asia’s weakest performers in 2023.
In 2022, Thailand’s GDP growth stood at 2.6%, reflecting a moderately paced economic resurgence after grappling with the adverse effects of the Covid-19 pandemic. Now, the World Bank anticipates that the country’s GDP will show more robust growth, with a projected expansion of 3.9% in 2023 and 3.6% in 2024.
China’s pivotal role in driving growth in Thailand’s tourism industry
Thailand’s tourism sector is a significant driver of economic growth, contributing approximately 18% to the country’s GDP. However, the industry faced unprecedented challenges due to the Covid-19 pandemic. Before the pandemic, it accounted for over 17% of current account receipts and employed 20% of the population.
And Chinese tourists have historically made up for the lion’s share of international arrivals in Thailand. In 2019, they comprised an impressive 28% of all international tourists, totalling 11 million visitors and generating a substantial 530 bn baht ($14.82 bn) in revenue.
Fast forward to the first eight months of 2023, and approximately 2.1 million Chinese tourists have visited the country, constituting around 11.73% of the total international tourist arrivals during this period.
Thailand remains a favoured destination for Chinese travellers this year, attracting about 3% of all mainland China’s outbound tourists this year. Meanwhile, the Tourism Authority of Thailand has set a target of attracting 5 million Chinese tourists for the entire year.
All in all, Thailand welcomed 17.9 million foreign tourists between January to August 2023, marking a significant increase from the 3.2 million arrivals during the same period in the previous year. The country now anticipates a total of 29 million foreign tourists for the year, a substantial jump from the 11.5 million in 2022.
Also, despite these positive trends, it’s important to note that this is still below the pre-pandemic levels of 2019 when Thailand received 39 million visitors.
Beyond the tourism sector, Thailand’s newly appointed prime minister is looking to increase consumption amid high living costs by offering 10,000 baht ($280) to Thai citizens aged 16 and above.
Additionally, Srettha Thavisin has announced that over the next four years, the objective is to achieve an average annual economic growth rate of 5%. As per the government, this would elevate the minimum daily wage to 600 baht ($16.78) and increase the salaries of individuals holding bachelor’s degrees to 25,000 baht ($699.24).
“Thailand’s economic recovery could be constrained by a global slowdown, while the new coalition government’s economic stimulus policies could lead to higher government debt,” said Fitch Ratings.
In light of these evolving economic conditions, Thailand’s National Economic and Social Development Council (NESDC) has revised its growth projections for Thailand’s economy in 2023. Previously, the NESDC had forecasted a growth range of 2.7% to 3.7%. However, it now anticipates a growth rate of 2.5% to 3.0% for the year.
