World Bank on Tuesday expected Thailand’s economy to contract at least 5% this year, which is among the sharpest projected declines in the region, as the Covid-19 outbreak shock hit the country with a significant economic impact and it would take more than two years to return to pre-pandemic levels.
Thailand economic growth slowed from 4.2% in 2018 to 2.4% in 2019, reflecting an impact of U.S.-China trade tension on exports demand, along with slowing public investments driven by delay in the passage of the FY 2020 budget, and a drought.
Following the pandemic, the country was likely to be one of the hardest-hit economies in the East Asia and Pacific Region. In the first quarter of 2020, Thai GDP posted a contraction of 1.8% year-on-year and 2.2% quarter-on-quarter.
“The economic impact of Covid-19 has been severe, particularly due to Thailand’s openness to trade and exposure as a tourism hub.” said in the Thailand Economic Monitor: Thailand in the Time of Covid-19 by World Bank.
“The tourism sector, which accounts close to 15% of GDP, has been severely impacted with a near cessation of international tourist arrivals since March 2020. Finally, the mobility restrictions imposed in response to the outbreak, while critical to flattening the infection curve, have severely dented private consumption, particularly for retail and recreational services. This is reflected also in the sales of durables, which have seen a sharp decline of nearly 12% in y-o-y terms in Q1 2020.” added the report.
Moreover, World Bank has estimated the pandemic would lead to sever jobs losses, which reference to the NESDC forecast in which 8.3 million workers will lose employment or income.
The economic recovery is projected to pick up in 2021, growing by 4.1% and by 3.6% in 2020. However, it depends on an effective economic response to support vulnerable households and firms.