Thailand’s economy is facing rising inflation and slowing export growth with fears of a GDP contraction in the second quarter. The scrapping of the Thailand Pass regime altogether is one of the last cards the government has to play to boost foreign tourist numbers along with later nightlife opening hours and the abolition of the outdoor face mask mandate.

With fears that Thailand’s economy in the second quarter may go into reverse with a GDP contraction and its highest rate of inflation for fourteen years in May, a proposal, on Monday, from Minister of Tourism and Sports Phiphat Ratchakitprakarn to table a proposal to rescind the Thailand Pass application for foreign tourists entering the kingdom may look like a no brainer but these are not ordinary times. The announcement by Mr Phiphat came in advance of a visit by the Prime Minister, Prayut Chan ocha, to Phuket which was had very much a feel of an election stop and comes at a time when his government is nearing its end and everything, including moves to free up the foreign tourism market, is taking on a political dimension.

Prime Minister Prayut Chan ocha on his visit to Phuket on Monday where he spoke at Phuket International Airport and later at Phuttha Mongkol Nimit School in the city. Before the visit, Minister of Tourism and Sports Phiphat Ratchakitprakarn (inset centre) told reporters that he was going to ask that a proposal to abolish the Thailand Pass regime for foreign tourists be placed before the next meeting of the Centre for Covid-19 Situation Administration (CCSA) in a move designed to boost visitor numbers and the challenged Thai economy.

Thailand’s Prime Minister, Prayut Chan ocha, flew into Phuket International Airport on Monday and was met by the island’s MPs in what took on the appearance of an election campaign stop as the government leader told reporters, and later, an audience at a local school that he believed the kingdom was inferior to no other country and that it was essential that Thai people have pride in it and its three core institutions namely the monarchy, religion and the state itself.

At the airport, General Prayut praised staff going about their business welcoming arrivals and told reporters that the Phuket Sandbox Scheme, last year, which relaunched Thailand’s then moribund foreign tourism industry, was a huge success and something that is talked about around the world.

Minister told reporters he would propose that the Centre for Covid-19 Situation Administration (CCSA) moves to scrap Thailand Pass at its next meeting

Ahead of the PM’s visit, the Minister of Tourism and Sports, Phiphat Ratchakitprakarn, told reporters that he was going to propose to the prime minister that the government should move to completely scrap the Thailand Pass online application for incoming foreign tourists, which was retained last month for foreign arrivals only, based on a proposal supported Mr Phiphat’s Bhumjaithai Party cabinet colleague, Deputy Prime Minister and Minister of Public Health, Anutin Charnvirakul.

Currently, the Thailand Pass application for foreign tourists gives instant approval to enter the kingdom but applicants must first of all submit passport and vaccination details as well as insurance information to cover $10,000 into the system if they are vaccinated while non-vaccinated travellers must submit an RT-PCR negative test result within 72 hours of departure to get approval and the issuance of a QR entry code.

Ending the Thailand Pass regime would boost the economy now with an increase in foreign tourists

Mr Phiphat told reporters that such a move, at this time, would help boost the economy as Thailand faces a more challenging environment in the second quarter of the year with a potential surge in foreign tourism being one of the few upside factors currently forming part of the GDP equation.

This, along with increased nightlife hours and the abolition of outdoor face masks, are the last cards in the government’s hands as the economic clouds grow darker.

‘Once Thailand Pass is lifted, I am confident the number of daily tourist arrivals will go up to about 30,000 per day. The number may go up to 40,000 to 50,000 later in the year. In the past, the highest number of daily arrivals was 100,000. We have to fight to meet this target,’ he told the media.

The Bhumjaithai Party minister said he would suggest to General Prayut that his proposal be tabled at the next meeting of the Centre for Covid-19 Situation Administration (CCSA).

There are persistent rumours that the Prime Minister and other key government officials are intent on preserving the Thailand Pass application as an essential entry control.

All moves right now are more political

Additionally, we saw at last Monday’s cabinet meeting, that a recommendation from the Centre for Covid-19 Situation Administration (CCSA) can also be shot down by the cabinet as was the case with a proposal to rescind the outdoor face mask mandate, an argument which is still raging and increasingly taking on political overtones with more conservative voices in the government opposing such moves in the interest of public health.

The moves to return to normal are seen as merited based on personal freedoms as well as the prospect of economic gain with the continued imposition of such controls increasingly being proved to be a serious impediment to attracting foreign holidaymakers.

Conflicting signals nationwide and in Phuket on face mask mandate with two volte-faces this week

It comes as Thailand reportedly saw a marked improvement in visitors after it lifted testing on arrival from May although we are still awaiting confirmed figures.

Only 1.1 million visitors in the first four months of 2022 as some economists fear the economy could slide backwards in Qtr 2 with slower export growth

However, while it is thought the kingdom may achieve 5 to 10 million foreign tourist arrivals this year, the figure for the first four months was only 1.1 million although the trend is markedly upwards. 

It comes as some financial analysts and economists with leading banks in Bangkok are suggesting the possibility that the Thai economy may see a contraction of GDP in the second quarter as export growth has been hampered by supply chain problems and disruption to markets caused by the ongoing war in Ukraine.

In addition to this, the consumer price index for May has come in at 7.1% after the economy saw a respite in April due to fluctuations in oil prices which have now resumed an upward trajectory.

Higher than expected inflation

This was well ahead of a Reuters projection of 5.78% for the month and comes despite government intervention to support energy and food costs.

This figure is the highest seen in fourteen years for this period although economists are hoping that the kingdom’s annual rate for 2022 may be contained by a forecasted improvement towards the end of the year.

They also point to a core inflation rate of 2.28%.

Prime Minister Prayut in Phuket spoke to a famous Buddhist school about his government’s performance

After his talk at Phuket International Airport on Monday, Prime Minister Prayut Chan ocha was taken to a local school in a Toyota Alphard car, licence plate 9898 with reports that many Phuket locals, as superstitious as any in Thailand, took a note of the car registration number for lottery and gambling purposes as his cavalcade drove to his next rendezvous.

This was at the Phuttha Mongkol Nimit School, a well known and regarded Buddhist school in Phuket Town.

Before taking part in singing with students, the Prime Minister told his audience that Phuket was the face of Thailand and that his government was now moving beyond the pandemic crisis and other challenges which have led to an unprecedented situation.

PM references the Phuket Sandbox scheme as a key success and the importance of education in Thailand

Prime Minister Prayut said that, despite everything, the kingdom had never given up and referenced again the success of the Phuket Sandbox scheme.

United States is the top market since July 1st with 13% of Sandbox visitors originating stateside

He also emphasised the importance of education to Thailand to let young people access the core values of their country.

He said the challenge, in educational terms, was to help Thai students go beyond just reading and learning textbooks to learn how to think for themselves.

He declared that duties and rights come together and are directly related to the country’s key institutions: the Monarchy, Buddhism and the Nation or state itself.

He explained that his government had begun a lot of initiatives but that it would take time to see them through.

This included education where he noted that the future of Thailand would be determined by what was done today. 

‘The government has done everything in spite of many problems. But we don’t give up on education because this is the future of Thailand. What we do today is our future. Our country’s fundamentals are not inferior to anyone else. If we look back at our history hundreds of years ago, there is no country that is better than us.’

‘I’m doing everything I can’ says General Prayut after the government’s budget passed the first reading last week but with political dangers lurking 

Finally, he informed his audience that although he was the prime minister, he did not know everything so he endeavoured to bring in experts to help progress discussions.

‘I’m doing everything I can,’ he told his audience

Last week, General Prayut’s government comfortably survived a vote on the first reading of its ฿3.18 trillion budget bill but the prime minister still faces the prospect of defeat in a censure motion which may see the government voted down in July while General Prayut also faces a Constitutional Court review of his tenure as Prime Minister under the terms of the 2017 Constitution, as to when his limited 8-year term should expire, from when he was appointed following the 2014 coup or after his election by parliament to the role in 2019.

Government is in its death throes as divisions multiply with July likely to be a decisive month for the country

A survey, on Sunday, by the National Institute of Development Administration showed for the first time, that a majority of the Thai public does not think the present government will complete its four year term which expires early in 2023.

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Further reading:

Conflicting signals nationwide and in Phuket on face mask mandate with two volte-faces this week

Mask mandate to be scrapped in Thailand from mid June in a boost for the foreign tourism sector

Mask mandate to be scrapped in Thailand from mid June in a boost for the foreign tourism sector

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