Thailand lowers its economic growth forecast for 2021 to 1.3%

Thailand’s Ministry of Finance has cut its economic growth forecast for 2021 from 2.3% to 1.3%.

Medical staff take samples for COVID-19 testing in Bangkok, Thailand. (Photo: AFP/VNA)

This is the third time the ministry has downgraded its economic growth forecast for this year, as the Southeast Asian country is struggling to cope with a third wave of infections caused by the Delta variant, causing the number of new infections to rise. and daily deaths spike dramatically. Previously, the Thai Ministry of Finance lowered this index from 4.5% given in October 2020 to 2.8%, then from 2.8% to 2.3% due to the re-emergence of the outbreak. of the COVID-19 pandemic.

The strict measures being applied are now in effect in 13 heavily affected provinces, including the capital Bangkok, from July 20, including travel restrictions, night curfews, closure of centers commercial centers and ask people to work from home.

Fiscal Policy Office (FPO) Director Kulaya Tantitemit commented that the current outbreak has affected economic activity and expected foreign tourist arrivals in 2021, but improved exports and measures. Fiscal law will provide partial support. Rising exports and fiscal stimulus should help keep the economy from experiencing negative growth this year, after Thailand’s economy shrank 6.1% last year.

The FPO raised its export growth outlook for Thailand this year to 16.6% from 11% earlier this year, as the global economy and trade recover. Government consumption is forecast to grow 4.2%, with state investment up 9.5%. Private consumption is expected to grow by 1% annually and private investment by 4.1%.

The FPO expects the situation to improve in 2022 as the business sector gradually returns to normal, leading to 4-5% economic growth.

According to the FPO, there will be 12 million foreign tourists to Thailand next year. Spending by foreign tourists accounts for about 12% of Thailand’s gross domestic product (GDP). Thailand’s tourism industry lost about $50 billion in revenue last year, down 82% from a year earlier when the country welcomed nearly 40 million foreign tourists. Although Thailand is preparing to reopen, the Ministry of Finance expects only 300,000 foreign tourists this year, down from the previous forecast of 2 million.