According to an investigation by Reuters news agency, the Thai economy has apparently collapsed in the first quarter of this year. The renewed coronavirus outbreak in early 2021 is affecting consumption and tourism and has slowed the pace of the economic recovery.
Southeast Asia’s second-largest economy, which relies heavily on tourism, is likely to contract by 3.3 per cent in the first quarter compared to the previous year, the average estimate of 11 economists surveyed.
In the last quarter of 2020, it fell by 4.2 per cent. The economists surveyed predicted a growth of 2.1 per cent for the full year 2021, after a 6.1 per cent decline in 2020.
The analysts have revised their forecasts in recent months from about 3 per cent at the start of the year due to outbreaks and a slow introduction of vaccines.
The economy could contract again in the second quarter as most indicators remain weak, said Takit Chartchredsak, an economist at Asia Plus Securities. Earlier this month, the cabinet approved an additional economic aid package worth 255 billion baht to help the people affected by the recent outbreak.
“A fresh fiscal boost and a rebound in exports will help offset some of the impact, but the pace of the turnaround will be slower this year than previously thought,” said DBS economist Radhika Rao.
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