Thai tourism turnaround derailed as tourist arrivals plunge 10.9% in July

The Private Investment Index also slipped by 3.4%

A potential turnaround is slow in coming for Thailand’s tourism sector. Although tourist arrivals from Asia edged up in June, the number of foreign tourists remained below its normal trend and dropped 10.90% YoY.

A report by Maybank Kim Eng also noted that the Private Investment Index has not shown any signs of improvement, registering a 3.4% year-on-year drop in July.

“However, the central bank said construction in non-municipal areas slightly improved. Also, some businesses started to invest after receiving approvals for investment projects and factory permits which had been held up in the preceding period,” noted the report.

Here’s more from Maybank Kim Eng:

Bank of Thailand (BoT)’s Private Consumption Index (PCI) edged up0.20% YoY in July (the first increase since October) from -1.40% in June; MoM 0.90% from -1.30%.

It is interesting to see private consumption begin to expand YoY. Expenditure on non-durable items grew while consumer outlays on durable items remained flat.

On the other hand, the Private Investment Index (PII) has not shown any signs of improvement to us (YoY: -3.40% from -2.70% in June; MoM -0.40% from -0.20%).

The current account (survey 0.99b, MBKE USD0.50b, actual USD0.86b, prior USD1.84b), after posting the first surplus in three months in June, turned to deficit, as companies repatriated profits.

A drop in tourism revenue was another reason. The tourism sector continued to pick up from the end of June after the uncertainty with regards to political situation declined significantly.

As a result, tourist arrivals from Asia edged up. Nevertheless, several countries still maintained their travel warning levels.