The Bank of Thailand (BoT) believes gross domestic product (GDP) growth in the first quarter should beat the previous quarter thanks to continued recovery supported by private consumption and tourism.
According to BoT assistant governor Chayawadee Chai-Anant, the economy is steadily recovering and first-quarter growth should improve on both a quarterly and yearly basis, bolstered by domestic consumption and tourism.
The central bank is awaiting growth figures from the National Economic and Social Development Council (NESDC), Ms Chayawadee said.
The BoT reported on Friday that the economy slowed down in March compared with the previous month largely because of a decline in the value of merchandise exports (excluding gold), in line with weaker manufacturing production and private investment.
She said the export value dropped by 2.2% year-on-year in March following a 1.8% fall in February, with a 2.4% contraction for the first quarter.
However, exports picked up in April and the sector is expected to see a gradual improvement in the remaining months, in line with global demand, according to the central bank.
In March, private consumption grew 6% on a year-on-year basis, rising from 3.9% in February. For the first quarter, private consumption grew by 4.7%.
Meanwhile, activities in the service sector continued to improve, following positive domestic and foreign tourist numbers, said the central bank.
Foreign tourist arrivals as of April 25 were 8 million, in line with the central bank's forecast and trends. In March, offshore travellers tallied 2.2 million, rising from 2.1 million the previous month, while the figure in the first quarter was 6.4 million.
"The tourism recovery also supported the labour market in the service and tourism sectors. Employment in these sectors increased to a level close to the pre-pandemic period," said Ms Chayawadee.
The tourism rebound supported tourism income and the country's current account. The current account registered a surplus of US$4.8 billion in March, rising from $1.3 billion the previous month, with a surplus of $4 billion for the first quarter.
Headline inflation declined in both energy and raw food categories because of a high base last year, as well as a decline in raw food prices as supply increased.
Core inflation also decreased, especially in the processed food category, because of a high base last year.
In terms of exchange rates, the baht against the US dollar depreciated on average following a shift in market expectations towards a tighter monetary policy by the US Federal Reserve in early March.
During the second half of the month, the baht became more volatile against the greenback based on concerns over financial institution problems in the US and Europe.