Thai finance ministry expects 7.7% GDP contraction

THAILAND’S finance ministry on Thursday upgraded its 2020 gross domestic product forecast to a 7.7% contraction, still a record, from the 8.5% decline projected earlier, helped by government measures to mitigate the impact of the coronavirus pandemic.

The ministry also increased its 2020 estimate for exports, a key driver of growth, to a fall of 7.8% from an earlier 11% drop, deputy ministry spokesman Pornchai Theeravet told a news conference.

The government has announced a 1.9 trillion baht (US$60.76 bil) coronavirus response package to support Southeast Asia’s second-largest economy, which shrank the most in 22 years in the second quarter, with tourism badly hit.

“Stimulus measures introduced in the current quarter to boost consumption should increase GDP by 0.54%,” he said.

“The current stimulus measures are sufficient for now, but the government is ready to implement more if necessary,” Pornchai added.

He also said that the ministry forecasts to get about 6.7 million foreign tourists this year before rising to eight million next year.

Thailand has recently started to allow tourists to enter only on long-stay visas that also require quarantine, but those tourism officials have said those visitors would represent only a fraction of the pre-crisis numbers.

Last year, the tourism-driven country welcomed a record 39.8 million tourists whose spending made up 11.4% of GDP.

“Growing political protests have yet to affect the economy as domestic activity still continues,” Pornchai said.

For 2021, the ministry predicts the economy will grow 4.5% versus a previous forecast range of 4%-5% growth. It expects exports, also a key growth driver, to increase 6%, rather than rise 5% projected previously. – Oct 31, 2020

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