Despite projecting an upbeat economic growth outlook next year, Thailand's current account surplus is anticipated to narrow because of risks to the tourism industry and an expected rise in imports, says Standard Chartered Bank Thai.
Although the bank projected the economy to expand by 4.5% in 2019, helped in part by the upcoming general election, a narrower current account could stem from a drop in the tourism industry as Chinese arrivals have slumped since July, said economist Tim Leelahaphan.
Hotel bookings in next year's first quarter are expected to be lower than usual, although it falls in the high season, said Mr Tim.
Thailand's tourism industry continues to feel the negative impact from a tourist boat accident in Phuket that killed 47 Chinese tourists in July. Arrivals from China, which account for 30% of the total, fell 12% in August. They grew only 3% during China's Golden Week holiday, less than expected, reported the Tourism and Sports Ministry.
"The current account, which saw a surplus peak at 10% of the country's GDP driven by robust tourism, is expected to decline to 9% this year and 7% next year," he said. "The current account surplus may not be a selling point anymore."
Thailand's current account surplus was valued at US$800 million (26.6 billion baht) in August, down from $1.1 billion in July, reported the Bank of Thailand. The surplus was $21.7 billion in this year's first half and $50.2 billion in 2017. The current account measures a country's imports and exports of goods and services, earnings from cross-border investments, and transfer payments.
Thailand's sovereign credit rating could see an upgrade after the general election as the incumbent government's 20-year national strategy has clear action plans, said Mr Tim. These include a regional economic partnership supporting exports to neighbouring countries, a transport investment plan for 700 billion baht that has begun, and a high-speed railway linking Don Mueang, Suvarnabhumi and U-tapao airports in the Eastern Economic Corridor.
"Amid global trade uncertainty, foreign investors looking to develop a new investment base could see Thailand 4.0 among their choices," he said.
