The Bank of Thailand forecasted Thailand’s economic recovery will continue to be on track but the pace of improvement would be slower as the impact from the recent Covid-19 outbreak was more severe than previous forecast and the number of foreign tourists was still lower than expected.
Despite less severe impact from the new wave of Covid-19, BOT stated it still has negative factors on Thai economy including a weakening labor income and a higher unemployment rate particularly workers in the non-farm and hospitality sectors with about 1.2 million people are at risk of losing jobs. Public expenditure for the fiscal year 2022 is likely to be lower than the previous projection. Moreover, foreign tourist figures were lower than expected and the reopening plan would likely be more gradual.
However, the economy would thus expand in 2021 supported by the additional fiscal stimulus in the first half of this year and a delay of some budget disbursement from the fourth quarter of 2020 to 2021, as well as the continued export recovery.
Overall, high uncertainty remaining weighs on Thai economic outlook with possible downside risks. BOT pointed out in the near term, the economic recovery would depend on the resolution of the recent outbreak and the contemporaneous fiscal support. While over the mid-term, it would depend on such as a return of foreign visitors, a distribution of coronavirus vaccine in Thailand, a further fiscal support and a labor market situation.