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Thailand expecting a moderate contraction in Q1

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Thailand expecting a moderate contraction in Q1

Thai Central Bank in Bangkok
Photo: Reuters/Jorge Silva

Thailand’s National Economic and Development Council is expected to announce the country’s first quarter economic growth figures today.

Analysts project a 4-5% GDP contraction this quarter as the economic shock of the COVID-19 pandemic on the Thai economy continues to be felt. Tourism has slumped with a 38% drop in foreign visitors from January through March—including a 76% drop in March alone. With markets experiencing similar pandemic economic shocks, exports are predicted to see either nil growth or a dive of 8-10% this year.

Thailand is likely to maintain this recessionary track for the rest of the year as global travel restrictions hamper tourism recovery and forecast economic slumps in key markets like China and the US will likely keep export growth minimal in the near term.

In the long-term, this year’s recession may drive further impetus within the government to join the Comprehensive Progressive Trans-Pacific Partnership (CPTPP)—the alternative Japan-led regional trade pact to the China-led Regional Comprehensive Economic Partnership. The main benefits could include export growth of $271 billion or 3.7% of GDP and maintaining economic competitiveness with trade rivals and CPTPP members Singapore and Vietnam.

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