BANGKOK (Reuters) - Thailand's economy may expand less than forecast this year, a central bank official said on Friday, after a third wave of coronavirus infections and concerns about the presence of a highly contagious variant.

 

The tourism-reliant economy suffered the deepest slump in over two decades last year, down 6.1%, due to the impact of the pandemic, with the key tourism sector still struggling.

 

Uncertainties remain, with a risk that growth could be less than the Bank of Thailand's 3.0% forecast this year, senior director Chayawadee Chai-Anant told an analyst meeting.

 

"Although the economy will recover this year, there are still soft spots, particularly in the service sector," she said.

 

The current economic forecast, which was downgraded last month, has yet to include the impact of the new outbreak, she said.

 

"It is too early to say," she said.

 

However, in the worst case scenario, the economy might contract sharply like last year, if there were issues with variants and vaccines efficacy, Chayawadee said.

 

The outbreak may take more than two months to control in Bangkok, the health ministry said. It came ahead of next week's Thai holidays and as the country seeks to reopen to foreign tourists.

 

In the January-March period, Chayawadee said the economy might have contracted from the previous three months and the same period a year earlier, as a second coronavirus wave slowed activity.

 

Inflation should be close to the lower end of the 1-3% target range from the second quarter, Chayawadee said.

 

The central bank has left its key interest rate unchanged at 0.50% since mid-2020 after cuts to mitigate the impact of the first outbreak.

 

Together with fiscal measures, monetary policy would remain accommodative and the central bank was ready to use monetary tools to support the recovery, said senior director Sakkapop Panyanukul.

 

Despite recent weakness, the baht will likely be volatile and the central bank will ensure currency moves will not hinder the recovery, he said.

 

-- © Copyright Reuters 2021-04-09

 

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17 hours ago, snoop1130 said:

However, in the worst case scenario, the economy might contract sharply like last year, if there were issues with variants and vaccines efficacy, Chayawadee said.

Not even a mention of vaccine availability

You don`t need to be a rocket scientist to work that one out gentlemen.....

21 hours ago, snoop1130 said:

The tourism-reliant economy suffered the deepest slump in over two decades last year, down 6.1%, due to the impact of the pandemic, with the key tourism sector still struggling

With potentially zero tourists this year and losing the 1st QTR tourists last year, shutdowns and further lost businesses, if it does not contract again this year then the creative accountancy dept has been busy again.

Hey, Central Bank, instead of bemoaning dire straits with the latest Covid wave, why not work on getting your overpriced currency down?  Cut down on those mysterious foreign inflows, for one thing...

By eck, these Central Bank  bods sure are clever cookies. ????

4 hours ago, RichardColeman said:

With potentially zero tourists this year and losing the 1st QTR tourists last year, shutdowns and further lost businesses, if it does not contract again this year then the creative accountancy dept has been busy again.

Why would it contract again. I mean i don't think your an economist. They expect the economy to grow (from its previous low) happens in many countries. Not sure why you think it would fall even deeper. Its a comparison between a bad year and a less bad year. Overall it might be still a contraction if you compare with the previous good year. But they always do year on year comparisons.

8 minutes ago, robblok said:

Why would it contract again. I mean i don't think your an economist. They expect the economy to grow (from its previous low) happens in many countries. Not sure why you think it would fall even deeper. Its a comparison between a bad year and a less bad year. Overall it might be still a contraction if you compare with the previous good year. But they always do year on year comparisons.

Simply as last year they had -6% GDP based on still having Q1 tourism. If they do not get any tourism this year, they will automatically lose 1 quarter of tourists and income on the new 2021 GDP. The loss of 1 quarter of tourism and no new tourists arriving will probably wipe out any growth from  a -6% new base level. I would expect if no tourists come, GDP 2020 as -6% and 2021 at about -1 or 2%. Then with tourists hopefully in greater numbers Thailand should probably be posting plus 10% growths for the next 3 or 4 years. (which ironically would probably coincide with a pat on the back and a new election with the current lot saying 'just look at our growth !'

9 minutes ago, RichardColeman said:

Simply as last year they had -6% GDP based on still having Q1 tourism. If they do not get any tourism this year, they will automatically lose 1 quarter of tourists and income on the new 2021 GDP. The loss of 1 quarter of tourism and no new tourists arriving will probably wipe out any growth from  a -6% new base level. I would expect if no tourists come, GDP 2020 as -6% and 2021 at about -1 or 2%. Then with tourists hopefully in greater numbers Thailand should probably be posting plus 10% growths for the next 3 or 4 years. (which ironically would probably coincide with a pat on the back and a new election with the current lot saying 'just look at our growth !'

Ironically all the real economists even independent ones at world bank see the Thai economy grow. Also lockdown is less severe. I believe the real economist instead of the armchair ones. Sorry just believe that people who studied for it and have all the data have more information then you.

From my observation it is down 25% not 6.

40 million tourists prior now none, whats up?

1 hour ago, robblok said:

Ironically all the real economists even independent ones at world bank see the Thai economy grow.

Is that based on Thailand's previous forecast for opening up or not ? As it's about to get potentially very dismal. Expect severe adjustments in the coming months if they cannot control covid

 

1 hour ago, robblok said:

Also lockdown is less severe.

Thailand is top 3 for tourism related income , say 20%.  so, from tourists its far worse potentially than last year, a whole 10 millions worse. Thailand cannot survive of thai tourism

 

1 hour ago, robblok said:

I believe the real economist instead of the armchair ones.

Have you ever seen an Thai economist lose his job when they get it direly wrong ? 

It is a good thing that Thailand has a good market for rice, and all the food and fruits, shrimp and other export meats

as well, plus its factories that produce many products that get exported and or bought by the local population .

  This is why the country is still in decent shape. Too bad that the baht is still so strong, though.

Geezer