The World Bank lowered Thailand’s economic growth prediction from 2.2% in July to 1%, citing an increase in COVID-19 cases and a delayed reopening to visitors.
Last year Thailand suffered its worst year since the Tom Yam Kung crisis (1997 Asian financial crisis), with the economy contracting by 6.1% as the pandemic halted all tourism activity, causing havoc on one of the country’s most crucial contributor sectors.
Kiatipong Ariyapruchya, senior World Bank economist for Thailand, told a virtual briefing that the economy is now expected to return to pre-pandemic levels in 2023.
“The economic recovery to pre-COVID levels will be a year slower than previously expected in 2022,” he said, adding that the estimate was based on Thailand reaching 70% vaccination rates in the first half of 2022.
Additionally, Kiatipong stated that the World Bank agreed with the government’s decision to raise the public debt ceiling in order to help the economy.
For Asia outlook, the World Bank slashed its economic growth prediction for developing countries in East Asia due to the coronavirus delta variant’s impact.
Excluding China, emerging countries in East Asia are expected to grow at 2.5% this year, down from a 4.4% prediction in April. China, on the other hand, should expand by 8.5%.
The World Bank said that the region is “suffering a reversal of fortune” after China, Vietnam and other governments contained coronavirus outbreaks last year. Data has shown that business activity in Vietnam, Thailand, the Philippines and other economies was improving but now is “showing signs of slowing down.”
“The region is being hit hard by the COVID-19 Delta variant while many advanced economies are on a path to economic recovery,” the World Bank said. “COVID-19 will reduce growth and increase inequality unless the scars are addressed and the opportunities grasped.”