Thai business groups see GDP contracting 3%-5% this year

By Orathai Sriring and Kitiphong Thaichareon

 

FILE PHOTO: A view of the business district is seen from the rooftop of the Baiyoke Sky Hotel during the coronavirus disease (COVID-19) outbreak in Bangkok, Thailand, April 29, 2020. REUTERS/Athit Perawongmetha

 

BANGKOK (Reuters) - Thailand's economy may shrink 3%-5% this year, sharply down from growth of 1.5%-2.0% projected in March, as the coronavirus pandemic hits global demand and domestic activity, a group of leading business associations in Thailand said on Thursday.

 

The group also cut its forecast for 2020 export, a key growth driver, to a fall of 5%-10%, from zero growth to a 2% drop, according to a joint standing committee on commerce, industry and banking.

 

"Any V-shaped recovery may be difficult as the outbreak is not over yet... tourism might pick up this year," Supant Mongkolsuthree, Chairman of the Federation of Thai Industries, told a news briefing.

 

Southeast Asia's second-largest economy may have contracted at least 5% in the first quarter, he said. Official gross domestic product (GDP) data is due to be released on May 18.

 

However, the group's 2020 GDP forecast is better than a 6.7% contraction projected by the International Monetary Fund. That would be the worst since the 1997/98 Asian financial crisis.

 

That is because the economy is getting support from government economic steps worth billions of dollars to mitigate the virus impact, Supant said.

 

The Thai central bank, which offers 500 billion baht ($15.42 billion) of soft loans to smaller businesses, said on Thursday it had lent 36 billion baht since the scheme began two weeks ago.

 

Thailand reported three new infections on Thursday, taking its total to 2,992. Fifty five people have died.

 

The government is expected to ease restrictions further later this month, which will be good for the economy, said Kalin Sarasin, Chairman of the Thai Chamber of Commerce.

 

The group also said its committee will study within a month whether to support a controversial proposal for Thailand to seek membership of an Asia-Pacific trade agreement to boost its economy hurt by the outbreak.

 

It is also suggesting the set up of a committee from the government and the private sector, including those who support or are against membership, to work on the matter.

 

Last week, Thailand's cabinet shelved a decision whether Thailand should join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) due to widespread opposition.

 

-- © Copyright Reuters 2020-05-07

 

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This is a fantasy dream.

I think will be more than 5%. 

Sure.

29 minutes ago, Yinn said:

I think will be more than 5%. 

Sure.

 

Welcome back ???? 

In perspective, the rest of the world write that this covid-19 situation is similar to 1930's depression.

Someone is wrong, me think.

20 minutes ago, OnTheGround said:

In perspective, the rest of the world write that this covid-19 situation is similar to 1930's depression.

Someone is wrong, me think.

A guy with a cheap, beat up auto does not care much if he gets into an accident. But the guy with Porsche cares alot! 

 

Thailand is a very low productivity country. People live frugally. So there is not so much to lose. Economy based on basic stuff like growing rice and assembling equipment. Not far to drop when you are already kind of low. Thailand is lucky that way. 

 

The productive economies are the ones that will suffer the most. 

IMO, a 5% drop in GDP is a fantasy.

With the Tourism Sector being damaged so badly from Covid19, and an ever weakening Export Market, I would think the GDP will contract by at least 12% over the next 12 Months or so .

Tourists are not going to return in any numbers for some time to come yet, and the Export Market will contract even further as the World enters an enormous Black Hole, which seems to have no bottom to it.

Thailands Domestic Economy is far from strong enough to take up most of the slack, as Consumer spending will be weak.

Dark times ahead, and not just for Thailand.

Ridiculous projections based on a computer model of an event that has never happened in world history. The deliberate shutdown of the economy. The numbers will likely be closer to 10 to 20% or higher, for the full year. Tourism alone will account for a huge drop in GDP.

In your dreams....reality will see more like double digit losses.  And when you consider a return to the overpriced Baht—it can only get worse.

IMF expect 6.7% GDP contraction which seem more realistic and will be the worse among ASEAN countries. Thailand depended on tourism way too much. There should be structural reforms to have a better balance from different sectors contribution. Don't think this government has the talents to do meaningful reforms. Prayut don't inspire leadership and he is not equipped with the competence and vision to face the challenges. 

22 hours ago, Eric Loh said:

Prayut don't inspire leadership and he is not equipped with the competence and vision to face the challenges. 

He's got Prawit; Anutin and Thamanat (the smuggler of self-raising flour) to help him.  What could possibly go wrong?

19 minutes ago, mikebell said:

He's got Prawit; Anutin and Thamanat (the smuggler of self-raising flour) to help him.  What could possibly go wrong?

Wouldn’t go wrong for those guys for sure. 

Most encouraging figures, sadly plucked out of the TAT bag of lucky numbers but in a weeks time they will be forgotten like all other predictions here. Reality says that a lot of people are in for a very rude awakening with houses and vehicles of the second hand variety flooding the market but also failing to find a buyer.

Time to write another letter to the 1500 richest military minds. We are all in this together.

On 5/7/2020 at 7:37 PM, Yinn said:

I think will be more than 5%. 

Sure.

What did you calculate? Please share as we all would like to know.

13 hours ago, Boomer6969 said:

What did you calculate? Please share as we all would like to know.

Impossible for me or profession to calculate exactly.

 

But be more than 5%. Sure. 

 

Half the business close now. Will be more. Sure

Thai tourism is 15 percent of GDP and they also figure that a further 5 percent is spinoff solely from tourism.  

Tourism is obliterated.  Do that math.  

And no, the Chinese will not, I repeat, will not be coming back this year.