Thailand’s economy likely contracted in the third quarter due to COVID-19 ties – Community News

Thailand’s economy likely contracted in the third quarter due to COVID-19 ties

A view of Bangkok Harbor along the Chao Phraya River is photographed during sunset in Bangkok, Thailand, June 2, 2021. REUTERS/Athit Perawongmetha/File Photo

  • Thailand’s GDP shrank 0.8% yoy in Q3 versus +7.5% in Q2
  • Q3 GDP seen at -2.5% q/q sa vs +0.4% in Q2
  • GDP data for the third quarter on Monday, November 15 at 0230 GMT

BENGALURU, Nov 11 (Reuters) – Thailand’s economy is likely to contract again in the past quarter, stalling a nascent recovery as strict restrictions to contain the spread of COVID-19 reduce consumption and an already ailing tourism sector, according to a Reuters poll.

After emerging from its worst recession since the 1998 Asian financial crisis in the second quarter, Southeast Asia’s second-largest economy shrank 0.8% in July-September from a year earlier, according to the median. forecast of 13 surveyed economists.

On a quarterly basis, gross domestic product (GDP) is likely to contract by 2.5%, seasonally adjusted, over the same period, after growing just 0.4% in the previous quarter.

The GDP data will be released on November 15.

Forecasts for the quarterly adjusted seasonal contraction ranged from 1.5% to 4.3%.

“The third quarter GDP numbers… will likely make for ugly reading,” noted Gareth Leather, senior Asia economist at Capital Economics.

“With the tourism sector still struggling despite the recent reopening of the border, the economy is facing a slow recovery. Our forecast is that GDP will not return to pre-crisis levels until the middle of next year.”

To help the vital tourism industry, Thailand allowed vaccinated visitors to Bangkok earlier this month without quarantine requirements.

But with only a fraction of foreign tourists expected this year compared to pre-COVID-19 levels, the economic recovery from the pandemic-induced slump will be slow.

Last month, the government cut its forecast for 2021 economic growth to 1.0% from the previously expected 1.3%, marking the fourth downward revision this year.

Thailand’s central bank is expected to keep interest rates at a record low of 0.50% until at least 2023, according to a separate Reuters poll released on Monday.

“Despite the strong performance of the export sector, the overall economy has been hit hard by the lockdown measures and poor sentiment regarding the government’s handling of vaccine procurement,” said Phacharaphot Nuntramas, chief economist at Krung Thai Bank.

“However, the plight prompted the government to take action, resulting in vastly improved vaccine availability, the approval of additional fiscal spending and opening the country to foreign tourists. Whether all these urgencies are enough to make a ​avoiding a technical recession in 2H 2021 remains to be seen.”

Reporting by Devayani Sathyan; Poll by Vivek Mishra, Md Manzer Hussain; Editing by Ross Finley

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