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- Malaysia: GDP expected to benefit from increasing tourism – UOB
Malaysia: GDP expected to benefit from increasing tourism – UOB
Senior Economist at UOB Group Julia Goh and Economist Loke Siew Ting comment on the expected increase in tourism in Malaysia and its impact on the GDP.
Key Takeaways
“The global tourism sector is expected to make a big leap this year as China reopens its borders and eases domestic restrictions sooner than expected since 8 Jan 2023. The World Tourism Organisation (UNWTO) projects that international tourist arrivals could reach 80%-95% of pre-pandemic levels in 2023 (vs. 63% in 2022) despite lingering global headwinds.”
“More than 32mn Chinese travelers visited Southeast Asia before the pandemic mainly to Thailand, Vietnam, Malaysia, Cambodia, and Laos. The effect of stronger tourism activity is expected to boost Malaysia’s GDP by at least 1.0ppt, which further supports our baseline GDP growth forecast of 4.0% for 2023. The uplift will come through further recovery in tourist arrivals, resumption of China outbound travelling, and sustained domestic tourism demand.”
“Key risks to Malaysia’s tourism outlook include a weaker global outlook, slower China recovery and return of China tourists, capacity constraints, and inflation risks. To mitigate these downside risks and sustain the tourism recovery will require consistent and stable reopening of countries and borders, minimal quarantine restrictions and requirements, affordable travel, improved travel connectivity, visa facilitation, processing of passports, build-up of capacity (i.e. airline seats, hotel rooms, and supply of labour), technology improvements and e-payment facilities, better safety and security.”
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