Thailand’s Economy Officially Contracts After Covid-19

For the first time since 2014, Thailand’s economy has officially shrunk by 1.8%. According to the National Economic and Social Development Council (NESDC), data from January-March has concluded a forecasted decrease for the 2020 gross domestic product (GDP) to a contraction of 5.0-6.0% from growth of 1.5%-2.5% projected in February.

The median estimate in a Bloomberg survey of economists was for GDP to shrink 3.9% last quarter.

On a quarterly basis, the economy shrank a seasonally adjusted 2.2%.

That would be the worst decline since 1998 when the Asian financial crisis ravaged the economy.

The agency also said its projection for this year’s exports and foreign tourist numbers, the main drivers of Thai growth will see a decrease.

The agency revised October-December’s quarterly GDP to a 0.2 contraction from 0.2% growth, meaning the economy technically slipped into a technical recession.

Thailand’s economy will be hit the hardest in the second quarter by lockdowns, before gradually recovering, NESDC Secretary General Thosaporn Sirisumphand told a news briefing.

Most economists believe the central bank will cut its key interest rate by 25 basis points to 0.5% when it meets on Wednesday.

Thailand’s economy largely relies on tourism and trade, both of which have taken a severe blow as countries around the world implemented strict measures to contain the coronavirus outbreak. Official data shows a 74.6% plunge in foreign tourist arrivals in March compared to last year’s numbers.

The government has implemented a stimulus package worth about 15% of GDP to help cushion the economy, which it expects will contract 5%-6% this year.

Some lockdown restrictions were eased this weekend, with shopping malls and retail businesses reopening.

Read More: List Of Businesses That Are Supposed To Re-open Tomorrow (May 17)

Other countries such as Japan have reported official recessions, with more nations inevitably announcing economic shortages in the near future.

Also Read: Japan Slips Into Economic Recession

SOURCE: Bangkok Post

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