The economic recovery in Thailand is likely to take longer than previously predicted, primarily due to the dramatic decrease in the number of international visitors, according to the Bank of Thailand.
As the pandemic continues to hamper international travel, the central bank slashed its GDP growth forecast for 2021 from 5 to 3.6 percent.
According to Titanun Mallikamas, secretary of the Monetary Policy Committee ( MPC), the central bank has updated its estimate of international arrivals for next year from the previous 16.2 million to 9 million.
The condition of the epidemic and the offshore influence have been more serious than expected. Higher instances of illness, second-wave outbreaks, and longer shutdown measures have been confronted by many nations, Mr Titanun said. Such considerations would have an impact on international travelers intending to visit Thailand.
"With this possibility [the gradual recovery of international visitor figures], it would take at least two years for total economic growth to rebound to pre-pandemic levels," he added.
The central bank earlier cautioned that if the government were to bar international visitors from entering the country, Thailand's tourism industry will face higher risks next year.
Global tourist figures were 6.69 million in the January-July period, down 71 percent year-on-year, with expenditure down 70.4 percent to 332 billion baht from a year ago.
After April, when a travel ban was enforced by the government, Thailand, which had a record 39.8 million tourist arrivals last year, has reported zero international tourists.
Both economic forecasts for next year have also been reduced by the central bank.
Consumer demand is expected to decline from 2.5 percent to 2 percent, while consumer and public expenditure development have been revised from 5.6 percent to 4.2 percent and from 14.1 percent to 11.4 percent.
Merchandise exports are expected to rise by 4.3%, down from 8.4%, and imports are primed for 4.4% growth, down from 7.3%.
However, Thailand's economic outlook for 2020 has been slightly revised by the central bank.
Since the second-quarter GDP contraction was less than predicted, the economy is projected to shrink by 7.6 percent, narrowing from the 8.1 percent reported previously.
In the second quarter, GDP dropped 12.2 percent from a year ago, the largest fall since the Asian financial crisis of the late 1990s. As Covid-19 continued to take its toll on the global market operation, the first-quarter GDP witnessed a 2.5 percent year-on-year fall.
In other reports, the MPC voted unanimously on Wednesday to keep the policy rate unchanged at 0.50 percent.
The Committee noted that extra accommodative monetary policy, as well as additional economic, financial, and credit steps, would lead to the reduction of adverse effects and help the recovery of the economy.
The MPC also needs potential government initiatives by different departments to be more tailored and timely, Mr Titanun said.
Jobs, economic reform, and economic development should be constantly promoted by policies, he added.
In order to ensure a sustainable economic recovery, the state-led policy should concentrate on supply-side policies to help the evolving economic environment, market practices trends, and the growth of labor skills compatible with post-pandemic conditions, Mr Titanun said.
Source Bangkok Post
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