Economist predicts economy will shrink 8.9% this year, despite easing of restrictions

A leading economist is predicting the Thai economy will contract by 8.9% this year despite the easing of Covid-19 restrictions, far higher than previous estimates from local and international economic pundits. Amonthep Chawla, head of the research office at CIMB Thai Bank says that although Thailand is heading toward the fourth phase of lockdown easing, with more businesses to be reopened next week, the economy is still far from showing signs of recovery. He believes that the impact of Covid-19 on the Thai economy will be most evident in the second quarter, with expected 14% GDP contraction.

“Productivity, confidence and consumer spending will remain low in the period ahead.”

Thailand’s economic outlook for the second half of this year is slightly brighter but the GDP could still contract by 10%. Key factors are risks of a second wave of virus infection and oil prices, according to Amonthep.

Thailand’s government has set July 1 for the lifting of many of the remaining business lockdown measures and, tentatively, the resumption of some international travel although nothing has been confirmed at this stage. Security officials say all businesses and activities will be allowed to resume fully in July.

The secretary-general of the National Security Council says the lift of restrictions will amount to a complete reopening of the country, but that people’s cooperation is important, especially regarding the use of face masks, social distancing, handwashing and limited activities.

“As long as the disease is spreading worldwide, we will have to fight against it for a while.”

PHOTO: Amonthep Chawla, head of the research office at CIMB Thai Bank

SOURCES: Chiang Rai Times | TNA