The economic landscape in Thailand will change significantly in 2022. The country’s recovery trajectory supports the World Bank’s forecast from December 2021, which predicts a 3.9% growth in 2022. The growth could still alter, though, depending on how the economy and business sector respond to new trends in 2022. The best time to invest in starting a business in Thailand may be right now.
Travel Recovery
This year, there should be fewer travel restrictions due to the rise in vaccination rates around the world. Apart from local flights, medium- to long-haul flights will grow this year as tourism starts to pick up the slack. In fact, as a way to support the industry’s recovery, Thai leaders intend to maintain a quarantine-free visa program for travelers with vaccinations beginning in February of this year. With this in place, more tourists may visit the Kingdom for leisure.
Although there are still COVID cases, the number is lower than it was during the height of the delta waves. Because of this, they are manageable. The government’s choice to reopen its borders to foreign travelers is consistent with its initiatives to revitalize the travel and tourism sector and treat the COVID pandemic as an endemic disease. Economists anticipate that between 4 and 7 million foreign arrivals will take place this year as a result of the renewal of the quarantine-free visa program, which will support the economic recovery.
Saving and Spending Behaviors
Most consumers have saved more money over the last two years than they have spent. The uncertainty of the pandemic and its financial impact on their income were the causes of this behavior. The purchasing power of consumers will increase as employment rates start to rise and business activity recovers further. According to projections, consumer spending will increase by about 4% in 2022 and be crucial to the growth of the nation’s economy. Additionally, if the COVID cases are under control and you may expect no more lockdowns. Due to this, consumer spending can boost the global GDP score by 3%. Despite this, it won’t be until 2023 before spending values reach their pre-pandemic levels.
Digital Activity
The adoption of technological solutions continues to be at the forefront of Thailand’s recovery efforts to rebuild its economy and ensure a more competitive position in the world as 2022 gets under way. As a result of the pandemic’s effects on mobility, there has been a noticeable rise in the use and consumption of digital technologies. This behavior not only applies to consumers but, more importantly, extends to businesses as well.
To make their operations more accessible and convenient for their customers, businesses have incorporated digital technology. By doing this, they raised Thailand’s productivity and trade rates. Therefore, many MSMEs in the Kingdom adopted digital commerce as their primary platform, which helped to lower transaction costs and open up new markets. This shift to the digital era created new opportunities for business owners to incorporate in Thailand and will continue to play a big role in the corporate sector going forward.
Potential Risks
Disrupting Global Economy
Even though this year’s economic growth has a lot of potential, there are still a number of unknown factors that could endanger the recovery process. Omicron, a new COVID variant, is one of them. It’s unclear how the pandemic will progress this year, but one thing is certain. It will have the biggest impact on how well the economy performs now and in the future.
Increased Inflation Rates
The rising inflation rate is a great matter of concern. Prices for goods and services will undoubtedly skyrocket due to supply chain disruptions brought on by the pandemic. Up until equilibrium, where supply and demand are in balance, the inflation rate will continue to rise steadily at 2%. Fortunately, there is normalcy in shipping bottlenecks and the flow of goods is reaching stability. This stabilization will develop more by the second half of this year.
Shift in the Labor Market
Numerous factors, ranging from COVID disruption to digital transformation, have made it possible for the global labor market to change. As a result, job descriptions have changed, and new skills are increasingly in demand. The services industry, production, and technology are among the industries in the nation with the highest labor demand. These sectors will have an impact on the developments of labor market. There will be encouragement for companies to adopt new business strategies. Additionally, it will help the companies to organize workforce development to meet the demands of the current workplace.
The Bottomline
Based on these trends, 2022 presents fresh chances for companies to develop and grow despite any potential obstacles. Additionally, Thai government focuses on incorporation of foreign companies in Thailand. This is for speeding up the recovery of the economy and support financial expansion. Therefore, we advise that you must invest in an economy at the time when it is growing or recovering. This helps the investor to see high returns as soon as the economy reaches equilibrium and stability.
As a foreigner, you may find it difficult to start your business in Thailand. Our team of seasoned corporate lawyers and foreign business registration specialists in Thailand will help you in doing so. You can connect with them now. Alternatively, you can also email us your requirement in details at [email protected].
