WB East Asia and Pacific Chief Economist Aaditya Mattoo said at a virtual press conference on March 31 when the bank released its latest East Asia and the Pacific Economic Update report, that the country’s tourist arrivals are projected to increase to 27 million in 2023, reaching 68% of the pre-pandemic level, and are expected to accelerate and surpass the pre-pandemic level by 2024.
Mattoo said though the Southeast Asian country's inflation remains higher than the target range, the inflation pressures have eased.
He warned about domestic challenges such as rising household debt levels, rapid aging, low capital investment accumulation and declining export competitiveness, which may limit Thailand's potential growth, and advised deepening reforms, especially in the service sector.
To ensure sustainable development, Kiatipong Ariyapruchya, the WB's senior economist for Thailand, said besides maintaining fiscal stability and sustainability, Thailand must further open up the service sector, increase investment for climate adaptation and enhance social protection for the aged and poor.
Meanwhile, the bank projected the Malaysian economy to grow at a more moderate pace of 4.3% in 2023 thanks to domestic demand amid an expected slowdown in external demand.
Private consumption growth is forecast to remain robust, albeit at a slower rate at 6.3% in 2023, as compared to 11.3% in 2022, the WB said in the report.
According to the report, private consumption growth is supported by improvements in labor market conditions, as well as ongoing income support measures from the government.
Meanwhile, investment is projected to increase by 4.4% in 2023, as compared to 6.8% in 2022, reflecting the continued flows of investments in the private and public sectors.
Malaysia's inflation, on the other hand, is forecast to moderate to between 2.5 and 3.0% in 2023, as compared to 3.3% in 2022, as global supply constraints ease, and commodity prices stabilize.
Source: VNA