Economic Update: GDP and Tourism
Thursday 7th of November 2019
October Economic Update - Real Economy
Gross Domestic Product
According to the National Bureau of Statistics, 2019 2nd quarter GDP estimates show an increase of 9.4% compared to the 2nd quarter of 2018, where as the first quarter this year showed a 4.7% annual increase. The main contributors to this were the strong growth of the tourism sector, the transport and communication sector. However, there was a negative growth in two major sectors: construction; and wholesale and retail trade.
Forecasts
Based on revised estimates of October 2019 made by the MMA and Ministry of Finance, real GDP growth is expected to decrease to 5.7% in 2019, from 6.8% in October 2018. This decrease stems primarily from the decline in the construction sector, reflecting the completion of several government large-scale infrastructure projects in 2018, while most of the 2019 public sector infrastructure projects started towards the end of the year.
Nevertheless, real GDP is estimated to accelerate to 7.5% in 2020 due to strong tourism sector performance, followed by improvements in the construction sector due to increased expenditure on public sector investment projects by the government.
Tourism
There was an annual increase of 9% in both tourism arrivals and total bednights in September 2019. Arrivals growth during the month was mainly driven by the strong growth in Indian arrivals, which more than doubled compared to 2018, accompanied by significant growth in Italian, Russian and Polish arrivals.
Although there was an annual increase of 19% in operational bed capacity, occupancy rate decreased by 3%.
Overall, January-September 2019, total tourist arrivals grew by 16%, while total bednights of the industry showed a growth of 13% when compared with the corresponding period of 2018.
