Thai Finance Minister says expected 2.8% growth not satisfactory

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Thai Finance Minister says expected 2.8% growth not satisfactory

By Kitiphong Thaichareon and Orathai Sriring

 

FILE PHOTO: Thai finance minister Arkhom Termpittayapaisith speaks during an interview with Reuters in Bangkok, Thailand January 21, 2021. REUTERS/Chalinee Thirasupa

 

BANGKOK (Reuters) - Thailand's economy may grow 2.8% this year but is still not satisfactory, but fiscal measures will continue to support economic recovery as tourism remains weak, the country's finance minister said on Wednesday.

 

Southeast Asia's second-largest economy, which is heavily reliant on tourism and exports, contracted 6.1% last year, its deepest slump in over two decades as the coronavirus pandemic cut global demand and travel.

 

The economy this year will grow from last year's low base, "but that isn't what we are happy about because the output gap is about 7%," Arkhom Termpittayapaisith told a seminar.

 

Domestic activity will continue to drive the economy as the key tourist sector is far from recovering, he said.

 

"Demand from overseas might not return yet this year, that's why government measures are still needed to shore up the domestic economy," Arkhom said, adding tourism may not fully recover until 2023 or 2024.

 

The tourism sector slump continues due to tight travel curbs since last April, which saw foreign arrivals fall 99.8% in January year-on-year. Foreign receipts made up 11% of gross domestic product in 2019.

 

The country started its COVID-19 vaccination campaign on Sunday and is studying vaccine passports in a bid to boost tourism.

 

The government still has funds available under a 1 trillion baht ($33 billion) borrowing plan to support the recovery, Arkhom said, adding economic fundamentals remained strong and `fiscal position stable.

 

Arkhom said the government expects over the next two months to adjust rules on the central bank's 500 billion baht soft loan programme for smaller firms, some of which will be used for asset warehousing to help debtors that are still unable to repay loans.

 

($1 = 30.30 baht)

 

(Reporting by Orathai Sriring, Kitiphong Thaichareon and Sawasin Staporncharnchai; Editing by Martin Petty)

 

-- © Copyright Reuters 2021-03-04

 

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[RichardColeman]

if they contracted 6.1% with 'some' tourism last year. I think plus 2.8% with no tourism if they do not open up this year is plain nuts

[daveAustin]

Sh-1t. happens. Best thing to do is tell your boss... then politely suggest he resign and move along quietly.

[sammieuk1]

Expected 2.8% growth in BS is all that can be expected as the world begins to move on ????

[GrandPapillon]

contraction of 6.1% seems a bit low, in Europe with low annual growth rates, we are reaching 8% YoY contraction

 

I think high growth economies are more likely to face 10% to 15% YoY contraction,

 

are Thais making up numbers again ? wouldn't be the first time ????

[Destiny1990]

Seems that TAT did these optimistic  calculations..

[Isaan sailor]

China’s Covid-19 has impacted the world’s economies.  Best way to recover—bring your currency in line with your region.

[Cake Monster]

6 hours ago, GrandPapillon said:

contraction of 6.1% seems a bit low, in Europe with low annual growth rates, we are reaching 8% YoY contraction

 

I think high growth economies are more likely to face 10% to 15% YoY contraction,

 

are Thais making up numbers again ? wouldn't be the first time ????

6.1% contraction is indeed very low.

Foreign Tourists alone account for 11% of GDP, and  the number fell by 99,8% 

Exports fell by something like 10% also

Agro products fell also by about 8%, with a 17% reduction in Rice Exports alone.

Vehicle Sales and Exports fell by 12%

IMHO 15% is still on the low side.