In 2020, Thailand faced a challenging year for its economy due to the outbreak of the COVID-19 virus, which became an unavoidable crisis for the country. While many believe that the Thai economy has already passed its lowest point, recovery will take time, and certainly not in the near future.

Various relevant agencies, including offices and financial institutions, have assessed how the Thai economy is expected to perform in 2020. Each has adjusted its GDP forecasts according to the situation in each quarter. Let's check the information.

Bank of Thailand

The Monetary Policy Committee (MPC) has revised its forecast for Thailand's economy in 2020 from a previous estimate of a negative 5.3% to a negative 8.1%, marking the lowest figure in history.

The factors impacting the Thai economy stem from the COVID-19 outbreak, which severely affected tourism and exports. Exports are expected to decline by 10.3%, while tourism is projected to drop by 8.8%. Domestic demand, including consumption and private sector investment, has contracted more than anticipated, along with a downward trend in employment and income.

National Economic and Social Development Council

The National Economic and Social Development Council (NESDC) has adjusted its economic forecast for Thailand in 2020, predicting a decline of 7.5%. This is a result of the COVID-19 outbreak impacting the Gross Domestic Product, particularly in the tourism and hotel sectors, as well as exports facing the US-China trade war.

However, factors that could drive and support the Thai economy in the second half of the year include consumption and government investment, which may help improve the situation.

Fiscal Policy Office

The Fiscal Policy Office (FPO) estimates that Thailand's economy will decline by 8.5%, a figure lower than the 7.5% decline during the 1997 Asian financial crisis. The COVID-19 outbreak has caused the gears driving the country's economy to come to a halt.

SCB (Siam Commercial Bank)

SCB predicts that Thailand's economy will decline by 7.3%, believing that the economy has already passed its lowest point and is on a gradual recovery path. However, it still faces obstacles and risks that may impact economic recovery, including a significant decline in international tourist arrivals, uncertainties regarding the COVID-19 outbreak in various countries, risks of business closures/unemployment, especially for SMEs, and uncertainties regarding the extension of government support measures that are set to expire.

KBank (Kasikorn Bank)

KBank has revised its forecast for Thailand's economy from a previous estimate of a negative 5% to a negative 6%. The Thai economy in the remaining quarters of the year is expected to show deeper contraction in economic activities, alongside employment issues. Additionally, the international economy remains concerning, particularly regarding the COVID-19 outbreak, which keeps daily infection numbers high, and political issues in the US, both domestically and internationally.

Recently, KBank has further adjusted its GDP forecast for Thailand in 2020 to a negative 10% due to uncertainties stemming from the COVID-19 outbreak, a strengthening baht, and political issues. The outlook for Thailand's economy is expected to recover in a U-shaped pattern.

Moreover, international financial institutions have also predicted Thailand's economy, with the World Bank estimating a decline of 3%, the Asian Development Bank estimating a decline of 4.8%, and the International Monetary Fund estimating a decline of 6.7%.

SOURCE: smartsme