Thailand’s economy contracted by 12.2% as compared to a year ago. This GDP contraction is the largest since the Asian Financial Crisis more than two decades ago. The contraction, however, was not as severe as the median estimate of a 13% contraction in a Bloomberg survey of economists.
However, the outlook for the Thai economy remains weak as tourism and exports continue to slump from the fallout of the Covid-19 pandemic. This weakness is further compounded by the fact that the Thai Baht has gained more than 6% in the second quarter of 2020, further weakening the demand for Thai exports.
The Thai economic council cut its full-year forecast to 7.3 to 7.8% which is worse than earlier estimates of a 5 to 6% fall.
The government had announced a $60 billion stimulus package to counter the effects of the pandemic on the economy. Exports are expected to fall by 10% this year and second quarter unemployment was at 1.95%, the highest level since 2009 and double the usual rate. Another 1.8 million jobs may still be at risk. The government has already spent over 300 billion baht in cash handouts to keep consumption demand afloat. According to Bloomberg’s economists, tourism, which accounts for about 20% of the Thai economy, is not likely to recover to pre-COVID-19 levels till 2022.
The Invest Bangkok Property Editorial Team