Thailand's gross domestic product (GDP) growth is forecast at 2.5 percent this year, provided that the government maintains strict measures to contain new COVID-19 infections until February, said Krungthai Compass – a research unit of the Krungthai Bank.
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A crowded street in Bangkok, Thailand (Photo: https://www.thailand-business-news.com/) |
Krungthai Compass estimates the domestic economic growth outlook under two scenarios based on the coronavirus outbreak’s impact.
The government's stringent measures to contain the contagion, especially tight control in 28 red zone provinces, would largely affect domestic demand and local tourism, said chief economist Phacharaphot Nuntramas.
For the first scenario, Krungthai Compass predicts the government will maintain existing measures to contain the COVID-19 outbreak from January to February. This is projected to reduce local tourists to around 110 million, with losses in consumer spending estimated at 167 billion baht (around 5.5 billion USD).
The government's latest relief measures, which received cabinet approval on Tuesday, should help shore up full-year economic growth momentum to 2.5 percent in 2021, said Phacharaphot.
If the latest aid package is not implemented, the country's GDP growth this year would plunge to 1.5 percent, he said.
The second scenario sees the government's stringent measures extended to March, with local tourists dipping to 101 million and losses in consumer spending estimated at 239 billion baht.
Even with the government relief measures, Thai GDP would only grow by 2 percent in this scenario. Without the aid package, growth would expand by only 1 percent.
Phacharaphot said domestic tourism is expected to take at least three months to recover, a similar duration following the end of the first wave.
As domestic tourism is expected to gradually improve in the second half, this could cause unemployment to ease, he said./.