The new year promises new changes in Thailand’s economic landscape. According to the forecast conducted in December 2021, the World Bank expects a 3.9% growth in 2022, as evidenced by the country’s recovery trajectory.
However, the growth is still subject to change, depending on how businesses and the economy react to the emerging trends in 2022.
Travel Recovery
With the increase of vaccination rates worldwide, travel restrictions are expected to be more lenient this year. Economists believe that besides local flights, medium- to long-haul flights will gain ground this year as tourism begins to pick up the lost pace.
In fact, starting February this year, Thai leaders plan to continue a quarantine-free visa program for vaccinated tourists as a way to boost the industry’s recovery. With this in place, an uptick of leisure travel to the Kingdom is expected.
Although COVID cases are still present, the numbers are below the peak of delta waves. That’s why they’re considered manageable. The decision of the government to open up their borders once more to foreign visitors is in line with their efforts to revive the tourism industry and treat the COVID pandemic as endemic.
With the renewal of the quarantine-free visa program, economists predict that approximately 4 to 7 million overseas arrivals will happen this year, which will help strengthen the economic recovery.
Saving and Spending Behaviours
For the past two years, most consumers have saved more than they’ve spent. This behaviour was brought about by the uncertainties of the pandemic and its financial impact on their income. However, as business activities continue to recover and employment rates begin to rise, so do the consumer’s purchasing powers.
Based on the forecasts, consumer spending will expand to about 4% in 2022 and will play an integral role in the country’s economic growth. Moreover, provided that the COVID cases remain manageable and no lockdowns are put in place, consumption spending can accelerate the global GDP score by 3%.
Despite this, however, the value of spending will not return to pre-pandemic levels until 2023.
Digital Activity
As 2022 begins to roll out, the adoption of technological solutions remains at the forefront of Thailand’s recovery efforts to rebuild its economy and ensure a more competitive global position.
Since the dawn of the pandemic, the use and consumption of digital technologies have increased significantly as a response to mobility restrictions. This behaviour not only applies to consumers but, more importantly, extends to businesses as well.
Businesses adopted digital technology to their operational structure to offer more accessibility and convenience to their customers. In doing so, they increased the rate of productivity and commerce in Thailand.
Digital commerce, therefore, became the leading platform for many MSMEs in the Kingdom, thereby reducing costs of transactions and enabling new market reach. This transition to the digital landscape opened new opportunities for entrepreneurs to register a Thai company and will continue to be a significant gameplayer in the corporate sector moving forward.
Potential Risks Disrupting Global Economy
While it’s true that there is great potential for economic growth this year, there remain uncertain variables that can pose a threat to the recovery process. One of which is the new COVID variant, Omicron.
How the pandemic will continue to unfold this year remains questionable, but one thing’s for sure. It will be the most critical factor in determining the economy’s present and future performance.
Increased Inflation Rates
Another factor to consider is the rising inflation. Due to the pandemic’s impact on supply chain disruptions, the prices of goods and services will undoubtedly increase exponentially, especially during the first quarter of 2022.
The inflation rate will continue on a steady incline at 2% until it reaches equilibrium, where a balance between supply and demand is established.
Fortunately, this stabilisation is expected to happen by the second half of this year as shipping bottlenecks begin to ease and the flow of goods returns to normal.
Shift in the Labour Market
From COVID disruption to digital transformation, there have been numerous factors that enabled the shift in the global labour market. As a result, job descriptions have evolved, and the demand for new skills has taken root.
Among the various industries in the country, the sectors with the highest labour demand include the services industry, industrials, and technology. These industries will influence the direction of the labour market, encouraging businesses to adopt new business models and plan workforce development to meet the requirements of the present work environment.
Conclusion
Based on these trends, 2022 opens new opportunities for businesses to grow and expand despite the potential challenges. Moreover, Thailand company registration is still very much encouraged to help accelerate economic recovery and contribute to financial growth.
