Thailand’s GDP is forecast to be the worst economic recession among ASEAN countries in the Covid-19 pandemic, said the World Bank yesterday, September 29.
According to the organization’s study of the economic growth of countries in the Asia-Pacific region after the Covid-19 outbreak, Thailand’s economy could contract by 8.3 percent or as much as 10.4 percent if the trade and tourism sectors, as well as political uncertainty, still worsen by the end of this year.
The study mentions Thailand had faced many local transmission of Covid-19 cases during the start of the pandemic but had them controlled at the early stage by implementing strict travel and health measures and social distancing to prevent the spread of the coronavirus. This included closing their borders to tourism, a major industry for Thailand.
But the measures are a double-edged sword since the country heavily relies upon income from exports and the service and tourism sectors. They are now resulting in the sluggish recovery of the domestic economy which has become worse than China and Vietnam where the economic revival has now potentially begun.
If the study holds accurate, it will be the worst economic contraction for Southeast Asia’s second-largest economy, and even much worse than its 7.9 percent contraction in 1998 after the 1997 Asian financial crisis.
Kiatipong Ariyapruchya, the senior country economist at the World Bank, told the Associated Press that it will take at least 3 years for the country’s GDP to recover to pre-Covid standards.
He said: “A potential second wave of Covid-19, the ongoing drought and floods, along with the political tensions including the resignation of members of the economic team and ongoing anti-government protests in the country would possibly affect the Thai economy in the third and fourth quarters of this year until next year or, in the worst-case scenario, for another 3 years.”
Birgit Hansl, the World Bank’s country manager for Thailand, further stated that although the Thai government has launched several monetary stimuli, such as the ‘We Travel Together’ campaign or additional holidays, for their people to boost the domestic economy, they are not going to potentially recover the national GDP as a whole. She also stated that although a difficult problem keeping the foreign tourism industry shut was destroying the countries infrastructure for tourism.
“The government has to admit that the Emergency Decree is worsening the country’s economy. It is advised to partner with the private sector to come up with alternatives to balance the implementation of public health measures and the revival of the domestic economy,” Birgit concluded.