Thai third-quarter GDP contraction seen slowing to 8.6% year-on-year, slow recovery ahead, Reuters poll shows

By Orathai Sriring

 

FILE PHOTO: A view of the Port of Bangkok, Thailand, March 25, 2016. Picture taken March 25, 2016. REUTERS/Athit Perawongmetha

 

BANGKOK (Reuters) - Thailand's economy in July-September likely shrank at a slower pace than the prior quarter, a Reuters poll showed on Friday, as business activity improved after coronavirus restrictions were eased but tourism still slumped with zero foreign tourists.

 

Southeast Asia's second-largest economy, which is heavily reliant on tourism and exports, probably contracted 8.6% in the third quarter from a year earlier, after the second quarter's 12.2% drop - the sharpest decline in 22 years.

 

On a quarterly basis, gross domestic product (GDP) likely grew a seasonally adjusted 3.8%, after a record 9.7% contraction in the June quarter.

 

Thai officials said on Wednesday the economy had bottomed out and should fall less than earlier projections this year as consumption recovered on government stimulus.

 

However, the central bank expects activity to take at least two years to return to pre-pandemic levels while growing political protests could affect the recovery.

 

While Thailand has removed most restrictions as local infections slow, a travel ban imposed in April to curb the outbreak has kept foreign tourists at bay. It started last month to let some foreign visitors return.

 

"While tourists may start coming back, many hotels, restaurants and airlines have lost too much blood and cannot get out of the ICU immediately," said Kobsidthi Silpachai, head of capital markets research at Kasikornbank.

 

"Demonstrations also create doubt about political continuity and therefore expectations about economic policies."

 

Thailand has seen months of protests calling for the removal of Prime Minister Prayuth Chan-ocha, changes to the constitution and reforms to curb the powerful monarchy.

 

Exports have fallen due to soft global demand and a strong baht <THB=TH>.

 

The National Economic and Social Development Council, which compiles GDP data, forecast the economy would shrink 7.3%-7.8% this year and will provide an updated projection on Monday.

 

The poll predicted a 7.9% GDP contraction this year, which would be the worst since 1998's record 7.6% drop.

($1 = 30.22 baht)

 

(Additional reporting by Satawasin Staporncharnchai in Bangkok; Editing by Subhranshu Sahu)

 

-- © Copyright Reuters 2020-11-14

 

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The days of landing in Bangkok and hoping in a taxi or bus potentially won't be seen until 2022 ...

With GDP down, significant spending by the government and the bt. has regained all of its 'losses' over the past 6/9 months !!??