A deserted lounge at the Suvarnabhumi airport in Thailand's Bangkok amid COVID-19. (Photo: AFP/VNA)Bangkok (VNA) – Thailand's economy could contract by as much as 10.4 percentthis year as trade and tourism are severely dampened by COVID-19, with theongoing drought and floods adding to the woes, said the World Bank (WB).
The dismalfigure is a projection of the worst scenario, and it will take at least threeyears for the country's GDP to recover to pre-pandemic levels, said the WB’s senior country economist KiatipongAriyapruchya.
If this becomes true, it will be the worst economiccontraction for Southeast Asia's second-largest economy based on availabledata, much worse than the dip of 7.6 percent in 1998 after the 1997 Asianfinancial crisis.
Policy continuityis a factor affecting investor confidence, as there have been several changesin the government's economic team, while resurging political protests add tothe downside risk, Kiatipong said.
Thailand'sfull-year economic contraction is forecast at 8.3 percent this year in the basescenario, down from a 5 percent decline projected previously, the global lendersaid.
The baseprojection is in line with the Thai Fiscal Policy Office's 8.5 percent contraction forecast but is more pessimistic than the 7.6percent contraction anticipated by the Bank of Thailand.
The 8.3percent contraction is well below the country's potential growth of 2.5-3percent and is among the sharpest projected declines in East Asia, according tothe WB.
A resurgenceof COVID-19 infections in Thailand and globally is a key downside risk, whichcan hurt demand for Thailand's exports and impact domestic economic activity,the WB said./
VNA
