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Thai economy to grow 4% in 2021 following 6.5% decline in 2020

The World Bank is now expecting the Thai economy to see 4% growth this year, and a 4.7% growth in 2022, despite current challenges from the new wave of COVID-19 infections.

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Crowded downtown area in Bangkok

The World Bank now expects that the Thai economy to expand by 4 per cent in 2021, according to the latest World Bank Thailand Economic Monitor report “Restoring Incomes, Recovering Jobs” released on Wednesday (Jan 20).

This projection is an improvement to the country’s economic performance last year where a 6.5% contraction was expected.

In 2020, weak global demand, the sharp decline in international tourist arrivals, and domestic mobility restrictions depressed goods and services exports and private consumption.

Exports and private investment are estimated to have declined by 18.5 percent and 4.4 percent respectively, while household consumption declined by 1.3 percent.

The resulting declines in income have created economic hardship for many, though the Government has made good progress in implementing a substantial package of measures to support households and firms.

But the speed of economic recovery in Thailand has been slower than neighbouring countries such as Malaysia, Vietnam and China, especially in terms of industrial and service output.

1.5 million Thai people may have entered poverty in 2020

Nevertheless, projections indicate that an additional 1.5 million people may have entered poverty in 2020 due to the economic impacts of COVID-19, based on a poverty line of US$5.50 (2011 PPP) per day.

This year, the economy is expected to recover gradually, despite the recent second outbreak of COVID-19, and growth is forecast to pick up further to 4.7 percent in 2022.

However, the recovery remains vulnerable to downside risks, including from an extended resurgence of the pandemic resulting in a prolonged stagnation in tourism and domestic activity, a weaker-than-expected global recovery that could lead to continuing trade and supply chain disruptions, and high household debt levels.  

“The COVID-19 crisis and its economic impact have highlighted a key vulnerability for Thailand: the declining number of working-aged people, which compounds the challenge of recovering the economic losses of the last year,” 

Birgit Hansl, World Bank Country Manager for Thailand

The report recommends that in the short term, the government put in place training programs to improve workers skills and provide financial support while they get back to work. Ongoing efforts are required to ensure that education and training matches the needs of employers.

Thailand needs more employment stimulus policies

The number of unemployed persons jumped to more than 800,000 in October 2020 from only 370,000 in 2019, while the share of private investment in GDP in the third quarter of 2020 fell to its lowest level (14 per cent) since 2003.

Household debt reached 83.8 per cent of GDP in October, the highest level in 18 years.

To resolve these challenges, Thailand needs more employment stimulus policies, a proper debt-restructuring program and medium to long-term growth stimulus measures.

Economics

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%.

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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.

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Economics

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.

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Ko Samed deserted pier

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.

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