Thai economy to grow 4% next year, 1 point lower than Asean average: ADB

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Thai economy to grow 4% next year, 1 point lower than Asean average: ADB

By The Nation

 

 

The Thai economy will grow 4 per cent next year – more than 1 percentage point lower than Southeast Asia’s average, according to the latest forecast by the Asian Development Bank (ADB).

 

On Thursday, the bank downgraded the Asean region’s outlook for 2021, with Southeast Asia now expected to grow 5.2 per cent next year compared to 5.5 per cent forecast in September. 

 

The ADB also downgraded its 2020 GDP forecast for Southeast Asia to -4.4 per cent from -3.8 per cent in September. It projects the Thai economy this year will contract 7.8 per cent, down sharply from 2.4 per cent growth last year. 

 

The ADB’s 2020 GDP forecast for developing Asia is raised to -0.4 per cent, with 6.8 per cent growth expected in 2021 as the region continues to recover from the Covid-19 crisis. 

 

The new 2020 GDP forecast, published in a supplement to the Asian Development Outlook (ADO) 2020 Update, is an improvement from the -0.7 per cent forecast in September, while the outlook for 2021 remains unchanged.

 

However, prospects are diverging within the region, with East Asia set to grow this year while subregions including Southeast Asia contract.

 

East Asia is the exception, with an upgraded growth forecast of 1.6 per cent for 2020 on the back of faster than expected recoveries in China and Taiwan. East Asia’s growth outlook for 2021 is maintained at 7 per cent.

 

South Asia’s GDP is forecast to contract by 6.1 per cent in 2020, revised up from the 6.8 per cent contraction expected in September. Growth in South Asia is forecast to rebound to 7.2 per cent in 2021. The growth forecast for India, the subregion’s largest economy, for fiscal year 2020 is raised to -8 per cent, from the -9 per cent projection in September, while outlook for 2021 is kept at 8 per cent.

 

“The outlook for developing Asia is showing improvement. Growth projections have been upgraded for [China] and India, the region’s two largest economies,” said ADB chief economist Yasuyuki Sawada. “A prolonged pandemic remains the primary risk, but recent developments on the vaccine front are tempering this.

 

Safe, effective, and timely vaccine delivery in developing economies will be critical to support the reopening of economies and the recovery of growth in the region.”

Exports are rebounding quickly from substantial declines in the second quarter, said the bank. Mobility is also returning to pre-pandemic levels in East Asia and the Pacific, though recovery in tourism is likely to be delayed, it added.

 

The outlook for the Pacific is unchanged for both 2020 and 2021 at -6.1 per cent and 1.3 per cent, respectively. Central Asia’s growth forecast for 2020 remains at -2.1 per cent, but the outlook for 2021 is slightly downgraded to 3.8 per cent from the 3.9 per cent growth projected in September.

 

Asian inflation is expected to marginally ease to 2.8 per cent in 2020, from the 2.9 per cent projected in September, due to depressed demand and low oil prices. Inflation for 2021 is forecast at 1.9 per cent, down from 2.3 per cent forecast in September. Oil prices are retained at $42.5 per barrel in 2020 before increasing to $50 per barrel in 2021.

 

Source: https://www.nationthailand.com/business/30399420

 

 

-- © Copyright The Nation Thailand 2020-12-11

 

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[ourmanflint]

Can someone please explain how a 4% growth rate from -7.8% becomes a +4% growth rate, shouldn't it still be -3.8% relative?

 

Or do they actually mean growth will be 11.8% to take it into +4% growth?

 

Thai grasp of economics is always confusing

[RichardColeman]

15 minutes ago, ourmanflint said:

Can someone please explain how a 4% growth rate from -7.8% becomes a +4% growth rate, shouldn't it still be -3.8% relative?

It would be -3.8% over 2 years I guess. Meaning Thailand would technically have no overall growth from 2019 until 2022, when that extra 3.8% is made up from any +3.8% growth in 2022.

 

 

 

 

[Dagfinnur Traustason]

And now we have taken all world economic factors into acount, as well as put a magic spell at the pandemic. Besides that we also have the knowledge that turism will still have full confidence in Thailand as well as export will be same and no different trade agreements will be made.
 

On top of that we also have thought about all the Thai labour aspects and the spending power of both foreign turism and domestic Thai citizens. And there will also not be any more digging deep in the coffers for some groups begging for a hand out. At last we also have the enormous debt situation per capita in Thailand.

As I see it here, I will just have to congratulate the single genious that goes out with this, at it´s best speculative, information. Happy to read that someone finally has the power to understand the magic message of the crystal ball.

[lavender19]

And they know this how. If they put might in there somewhere I might believe it

[Soikhaonoiken]

There having a laugh again, how are you going to make up the 20% of GDP the Country has lost by closing the borders, unless the plan to reopen them on      1st Jan with no quarantine restrictions and hope the tourist will come...