The latest economic forecast for 2020 is worse than the record contraction of 7.6% for the Tom Yum Kung crisis, said Don Nakornthab, senior director for the economic and policy department, reports the Bangkok Post.
A double-digit contraction is expected in the second quarter, he said.
The central bank’s Monetary Policy Committee (MPC) on Wednesday (June 25) unanimously voted to leave the benchmark rate unchanged, saying targeted and timely fiscal measures along with accommodative monetary policy, credit measures and accelerated debt restructuring would remain vital to support employment and businesses during the economic recovery, said MPC secretary Titanun Mallikamas.
“The deeper contraction is mainly the result of weaker external demand, especially tourism and exports,” he said.
The MPC in March predicted the economy in 2020 would contract by 5.3%.
Mr Titanun said the central bank raised its forecast for 2021 economic growth to 5% from 3% projected three months ago.
The Bank of Thailand worsened the export contraction outlook to 10.3% from 8.8% previously forecast, while lowering foreign tourist arrival numbers from 15 million to 8mn this year.
In the second half this year, foreign tourists are expected to tally only 1mn, he said.
Domestic demand, both private consumption and private investment, would also contract more than previously assessed. Employment and incomes were projected to decline. Nevertheless, economic activities exhibited signs of improvement following the relaxation of the containment measures.