Southeast Asia’s second-largest economy will probably grow 2.7% this year, compared with an earlier forecast of 2.4%, finance ministry officials told reporters on Friday.

That performance will be driven by an estimated 4.5% growth in private consumption, which accounts for nearly 60% of gross domestic product.

Tourist arrivals are set to jump to 36 million this year from 35.7 million estimated previously, and inching closer to the record 40 million visitors the nation hosted before the pandemic.

Revenue from foreign visitors are seen at 1.69 trillion baht (US$46.7 billion), with per-capita spending per trip expected to rise to an average 47,000 baht.

The recovery in tourism, helped by easing of travel restrictions and return of Chinese tourists, will be the key driver of recovery this year, deputy finance minister Paopoom Rojanasakul said, adding that a greater coordination of fiscal and monetary policies can power growth to even as high as 3% this year.

The revised growth view of 2.7% — which matches the International Monetary Fund’s reading from April — validates the BOT’s stance that economic recovery is gathering speed and may ease pressure on policymakers to cut interest rate.

The central bank has resisted repeated calls from Prime Minister Srettha Thavisin and his aides to lower borrowing costs, saying the rate at the highest level in a decade was supportive of growth, and ensured financial stability.

With Thailand’s growth trailing its peers in the region for years, the government has unveiled plans for an about US$14 billion cash handout programme to stimulate economic activity.

The plan — which seeks to give 10,000 baht to each Thai aged 16 years and older under a certain income bracket — has been flayed by the central bank, which has called for it to be targeted at the poorer sections of the society.

Paopoom said the finance ministry’s GDP projection doesn’t include the impact of the cash handout set for the fourth quarter, and the economy will further benefit from recently announced measures such as soft loans for small businesses and tax incentives.

Tourism is one of Thailand’s key industries accounting for about 20% of total jobs and making up roughly 12% of the nation’s US$500 billion economy. Foreign arrivals this year through July 21 rose about 34% to 19.6 million from the same period in 2023.

In 2019 before the pandemic, Thailand saw a record 40 million foreign arrivals with the Chinese accounting for about 28% of the total.