The Bank of Thailand says Thai economy recovered from the first quarter setback in the second quarter of this year, while business confidence is also improving, but exports are likely to miss the target.
Although highly criticized by western democracies, the military takeover and resulting stability has restored Thai confidence. The stock exchange is on the rise, the baht is appreciating and domestic investment is at an all-time high.
Desperate farmers who were left penniless by the former government’s rice-pledging scheme have finally been paid. Tourists are starting to come back to Thailand but despite of recovery sign, exporter association concedes that the country’s export might not reach the growth target this year.
Exit from EU trade preference scheme may impact exports
Exporters will start to feel the impact next year from the European Union’s decision to curtail trade cooperation and trade visits with Thailand and the downgrade of the country by the US to the lowest standing in its annual Trafficking in Persons (TIP) Report although their good orders are not yet affected for the time being.
As Thailand is set to exit from the EU Generalized System of Preference Scheme at the end of this year, he said exporters are calling for the government sector to quickly arrange measures to assist them.
Don Nakornthab, Director of BoT’s Macroeconomic Policy, said Thailand’s gross domestic product (GDP) growth for the second quarter was 1-1.1 percent above the quarterly average, reflecting a strong comeback from the first quarter decline of 0.6 percent.
The second quarter economic growth is, however, down by 0.4 percent compared with the same period of last year, he said. But he said even though the expansion would be negative, the recovery is considered substantial.
He said the economy has passed its lowest point and has a tendency to go up since April this year.
He attributed the second quarter economic improvement to expansions of industrial sector, private spending and private consumption.
The senior BoT official conceded that the country’s export still faces slow recovery due to weak demands for agricultural, processed agricultural and automotive products in the Asian region.
Thailand’s export in May shrunk by 1.2 percent year on year, he said, adding that the country’s export value has to reach 20,000 billion US dollar each month from June to December in order for the country to achieve the annual growth target of 3.5 percent, set by the central bank.
Inflation in June this year fell by 0.10 per cent compared with that in May, becoming the first decline in 10 months, the Commerce Ministry’s advisor Ampawan Pichalai said.
Contributing factor to the decline was the economic measures announced and implemented by the National Council for Peace and Order, she said.
Such measure, she said, was the NCPO’s decision to freeze diesel and household cooking gas prices and its call for manufacturers and other producers to freeze their product prices for six months.
But year-on-year inflation in June rose by 2.35 per cent and inflation in the first half of this year stayed at 2.23 per cent.
World Bank lowers Thai GDP growth outlook to 2.2%
In the Thailand Economic Monitor released today, the World Bank adjusted its outlook on Thailand’s economic growth this year to just 2.2% from its previous forecast of 3.4%.
BANGKOK, July 15, 2021 – Thailand’s economy continues to take a heavy toll due to the COVID-19 pandemic and is projected to expand modestly at 2.2 percent in 2021, revised down from the 3.4 percent growth projected in March, according to the World Bank’s latest Thailand Economic Monitor “The Road to Recovery” published today.(more…)
Thailand’s Economy and COVID-19: Five Things to Know
Thailand’s GDP fell by 6.1 percent in 2020, the largest contraction since the Asian financial crisis. The tourism sector, which accounts for about a fifth of GDP and 20 percent of employment, has been especially affected by the cessation of tourist travel.
Like many countries, Thailand’s economy was hit hard by the COVID-19 pandemic last year. The country’s GDP fell by over 6 percent in 2020 and many workers, especially those related to the tourism sector, lost their jobs.(more…)
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