Thailand’s Economic Outlook Dims Further After Myanmar Earthquake

Thailand’s economic outlook worsened after the March 28 Myanmar earthquake, raising stability concerns and pressuring the central bank to consider a rate cut next month. The disaster disrupted regional trade and tourism, key sectors that drive Thailand’s economy, prompting analysts to revise growth forecasts downward.

Key takeaways

• Thailand’s economic outlook worsened after the Myanmar earthquake, heightening concerns over stability and prompting speculation of another interest rate cut.
• The disaster caused significant casualties and structural damage, with economic losses estimated at 20 billion baht due to disrupted consumer spending.
• Key sectors, including tourism and real estate, face setbacks, while the central bank weighs policy responses to mitigate financial strain.

The powerful earthquake, which has claimed at least 1,700 lives in Myanmar, also rattled Bangkok, where at least 18 people lost their lives. 

The disaster caused significant structural damage, including the collapse of a building under construction, leaving more than 70 workers missing. 

In response, Thailand’s benchmark stock index fell by as much as 1.7% on Monday, with property and financial shares bearing the brunt of the downturn.

Though Thailand avoided the extensive destruction seen in Myanmar, the tremors have compounded existing economic challenges. 

The Southeast Asian nation is already grappling with the fallout from U.S. President Donald Trump’s trade policies, mounting household debt, sluggish Chinese tourist arrivals, and a seven-month decline in factory output, primarily driven by weak automobile sales.

The Bank of Thailand (BoT) has already lowered interest rates twice, in February and October, to stimulate economic activity. 

However, despite this shift from a previously cautious approach, the central bank has been reluctant to fully commit to an aggressive easing cycle, even amid political pressure for further rate cuts.

In a report released Monday, Standard Chartered Plc noted that the BoT’s policy remains “outlook dependent,” meaning that the deteriorating economic situation could prompt an April rate reduction.

Similarly, Citi Research suggested that the central bank might consider a policy rate cut while urging banks and non-bank financial institutions to extend additional support to affected clients.

Kasikorn Research estimates that the immediate economic impact of the earthquake could reach 20 billion baht, mainly due to a downturn in month-end consumer spending on food and services, as panic forced millions of Bangkok residents to flee their homes on Friday.

In response to the crisis, the central bank has instructed financial institutions to offer special debt relief measures for disaster-affected borrowers, similar to those implemented following last year’s floods, according to Bank of Thailand Deputy Governor Roong Mallikamas. 

The central bank’s Monetary Policy Committee is set to convene on April 30 to assess the economic fallout and potential policy responses.

The property market is also expected to suffer, particularly condominium sales, as safety concerns prompt buyers to reconsider investing in high-rise buildings. This hesitation may lead to a shift in demand toward low-rise residences or single-family homes, as buyers prioritize safety and structural integrity. Developers might need to adapt their strategies, focusing on building designs that emphasize resilience and security to regain consumer confidence.

Analysts warn that lingering earthquake fears will likely delay the recovery of a sector already struggling with an oversupply of unsold units.

With economic uncertainty mounting, the coming weeks will be crucial in determining whether Thailand’s policymakers can stabilize the country’s financial outlook amid growing external and internal pressures.