Thailand: BoT updates forecasts on economy

  • The Bank of Thailand (BoT) has forecast the economy to shrink by 5.3% in 2020, the first contraction since the 2008 global financial crisis. It earlier predicted economic growth of 2.8% for 2020.
  • “The 5.3% contraction forecast does not take into account monetary and fiscal policy to support economic growth,” said BoT governor Don Nakornthab. “The government’s emergency decree, especially to curtail people’s movements, will help curtail new infections.” The public sector is the only engine available to support the economy, he said.
  • The central bank maintained its projection for government consumption growth at 2.6%, while cutting its public investment growth view from 6.3% to 5.8%.
  • The forecast for export growth in USD terms was lowered from 0.5% to -8.8% and import growth from 1.4% to -15%.
  • Private consumption is now expected to shrink 1.5% from a previous projection of 3% growth. Private investment forecast was revised from +3.4% to -4.3%.
  • Mr Don said the outbreak is spreading on a wider scale than the central bank’s earlier estimate, particularly outside of China. Based on data from the Public Health Ministry, the central bank expects coronavirus infections domestically to come under control in 2Q20, around Apr 20, but a turnaround for tourism will take time.
  • The bank forecasts 2021 GDP growth of 3%, said Mr Don.

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