Second Covid-19 wave a severe threat for Thailand’s economy

Sukhumvit Road in Bangkok’s central business district offers a dystopian sight

A second wave of coronavirus infections in Thailand, a country which managed the first outbreak fairly well, is now sending shockwaves across businesses and government agencies which hoped for a gradual recovery in 2021.

Instead, the new outbreak in late December has led to a another lockdowns in provinces contributing the most to the country’s GDP, including the capital Bangkok, as well as to an extension of the emergency decree which both has put all plans to reopen the borders for foreign tourists and revive the crucial tourism industry to rest.

Public life in the capital Bangkok has almost come to a standstill, shops and restaurants are calling it quits by the day, hotels are closed and entertainment venues shut down indefinitely.

Most factories in the surrounding provinces are still operating, but under strict safety measures and health controls.

Growth forecast to be cut again

The Bank of Thailand said on January 15 it might cut its growth forecast for this year in response to the new outbreak, which has seen case numbers almost triple in the last month.

It could lower the country’s gross domestic product (GDP) growth outlook by between one and four percentage points, depending on its severity and the effectiveness of containment measures, said the central bank’s senior director Chayawadee Chai-Anant.

The bank already lowered its GDP forecast for 2021 on December 23 to 3.2 per cent from 3.6 per cent. If the current lockdown measures are maintained for two months, it could impact GDP growth by one to 1.5 percentage points, she said.

But if the outbreak worsens and strict measures are imposed beyond that, GDP will likely be hit by a decrease between three and four per cent, she added.

New outbreak derails nascent recovery

Thailand has recorded 11,650 Covid-19 cases as of January 15, of which 8,906 recovered and 70 died. The country is currently averaging about 232 new daily cases, having gone several months last year without community transmission.

However, the recent outbreak, which saw infections in 60 of Thailand’s 77 provinces, could also impact more than 4.7 million workers, the central bank said.

The restrictions will likely derail the economy’s nascent recovery, according to some analysts who have lowered this year’s growth outlook for the country to below three per cent.

While the outlook remains generally uncertain, tourism would gradually recover in the second half of this year, while exports should also grow as the economies of trading partners improve, the Bank of Thailand said in a statement.

In 2020, the country’s economy may have contracted by 6.6 per cent, according to the central bank, which noted that this was the weakest since the Asian Financial Crisis in 1997/98.



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Sukhumvit Road in Bangkok's central business district offers a dystopian sight A second wave of coronavirus infections in Thailand, a country which managed the first outbreak fairly well, is now sending shockwaves across businesses and government agencies which hoped for a gradual recovery in 2021. Instead, the new outbreak in late December has led to a another lockdowns in provinces contributing the most to the country's GDP, including the capital Bangkok, as well as to an extension of the emergency decree which both has put all plans to reopen the borders for foreign tourists and revive the crucial tourism industry to...

Sukhumvit Road in Bangkok’s central business district offers a dystopian sight

A second wave of coronavirus infections in Thailand, a country which managed the first outbreak fairly well, is now sending shockwaves across businesses and government agencies which hoped for a gradual recovery in 2021.

Instead, the new outbreak in late December has led to a another lockdowns in provinces contributing the most to the country’s GDP, including the capital Bangkok, as well as to an extension of the emergency decree which both has put all plans to reopen the borders for foreign tourists and revive the crucial tourism industry to rest.

Public life in the capital Bangkok has almost come to a standstill, shops and restaurants are calling it quits by the day, hotels are closed and entertainment venues shut down indefinitely.

Most factories in the surrounding provinces are still operating, but under strict safety measures and health controls.

Growth forecast to be cut again

The Bank of Thailand said on January 15 it might cut its growth forecast for this year in response to the new outbreak, which has seen case numbers almost triple in the last month.

It could lower the country’s gross domestic product (GDP) growth outlook by between one and four percentage points, depending on its severity and the effectiveness of containment measures, said the central bank’s senior director Chayawadee Chai-Anant.

The bank already lowered its GDP forecast for 2021 on December 23 to 3.2 per cent from 3.6 per cent. If the current lockdown measures are maintained for two months, it could impact GDP growth by one to 1.5 percentage points, she said.

But if the outbreak worsens and strict measures are imposed beyond that, GDP will likely be hit by a decrease between three and four per cent, she added.

New outbreak derails nascent recovery

Thailand has recorded 11,650 Covid-19 cases as of January 15, of which 8,906 recovered and 70 died. The country is currently averaging about 232 new daily cases, having gone several months last year without community transmission.

However, the recent outbreak, which saw infections in 60 of Thailand’s 77 provinces, could also impact more than 4.7 million workers, the central bank said.

The restrictions will likely derail the economy’s nascent recovery, according to some analysts who have lowered this year’s growth outlook for the country to below three per cent.

While the outlook remains generally uncertain, tourism would gradually recover in the second half of this year, while exports should also grow as the economies of trading partners improve, the Bank of Thailand said in a statement.

In 2020, the country’s economy may have contracted by 6.6 per cent, according to the central bank, which noted that this was the weakest since the Asian Financial Crisis in 1997/98.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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