Thailand’s economy suffers biggest fall since 1998 Asian financial crisis

[webfact]

Thailand downgrades economic outlook despite smaller fourth quarter GDP fall

By Orathai Sriring and Kitiphong Thaichareon

 

FILE PHOTO: People visit shopping center to celebrate New Year Eve during the coronavirus disease (COVID-19) outbreak in Bangkok, Thailand December 31, 2020. REUTERS/Soe Zeya Tun

 

BANGKOK (Reuters) - Thailand cut its estimate for economic growth this year to 2.5-3.5% after suffering its worst slump in more than two decades in 2020 due to the shock from the COVID-19 pandemic.

 

The government had previously forecast growth of 3.5-4.5% for this year, and the downward revision comes despite latest data showing the economy shrank less than expected in the October-December quarter as domestic activity and exports recovered after coronavirus restrictions were eased.

 

The vital tourism sector remains in limbo because of international travel restrictions, and a COVID-19 outbreak in December has dealt a further blow to the country's fledgling recovery.

 

Southeast Asia's second-largest economy shrank 4.2% in the final quarter of 2020 from a year earlier, after a 6.4% contraction in the previous three months, National Economic and Social Development Council data showed on Monday.

 

On a quarterly basis, the economy expanded a seasonally adjusted 1.3% in the December quarter, after a revised 6.2% expansion in the September quarter.

 

Economists in a Reuters poll had forecast the economy would shrink 5.4% year-on-year and grow 0.8% quarter-on-quarter.

 

Somprawin Manprasert, chief economist of Bank of Ayudhya, said the GDP data was not a surprise and the economy should return to pre-pandemic levels in the third quarter of 2022, slower than earlier expected.

 

"Having had a bad crash, the economy was hit on the back by the second wave, so it's difficult to recover," he said.

 

The main stock index rose 0.6% after the GDP data while the baht gained slightly to 28.83 per dollar.

 

In 2020, the economy contracted 6.1%, the biggest fall since 1998, during the Asian financial crisis.

 

Thailand had largely contained the spread of coronavirus by mid-2020 but new cases detected in December have led to infections across the country and slowed consumption and domestic travel.

 

The NESDC now expects exports, also a key driver of growth, to rise 5.8% this year, rather than expand 4.2%.

 

But it also forecasts just 3.2 million foreign tourists this year, down from an earlier forecast of 5 million arrivals.

 

Last year, there were only 6.7 million foreign tourists versus nearly 40 million arrivals in 2019.

 

"Fiscal support will be key to underpin the recovery this year as monetary easing runs its course," said DBS economist Radhika Rao.

 

The government has supported the economy with a 1.9 trillion baht ($63.61 billion) stimulus package, while the central bank has slashed interest rates by 75 basis points last year to a record low of 0.50%.

 

($1 = 29.87 baht)

 

 

-- © Copyright Reuters 2021-02-15

 

- Whatever you're going through, the Samaritans are here for you

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[ThailandRyan]

It is still a decline and one that shows the economy is stalled unfortunately.

[Taxi]

Subtract the 1.9 trillion the government put into stimulus and you see the real impact to GDP. Presumably it's all debt as well.

[Snackbar]

Doesn’t add up

 

40m to 6.7m = 6.1% 

 

83.25% of 15% = 12.49

 

TIT

 

 

[Mike Rodik]

so they still expect millions of foreign tourists this year, looooooooooooooooooool

[amdy2206]

And the government continues to purchase weapons and items for the Army, Navy & Airforce, and sure to carry on getting all of their perks despite the rest of the country becoming more poverty stricken by the day.

[worgeordie]

Not just Thailand, I think the whole World is in deep sh*t.

the only upside is the sky* and seas are clearer.

*not in Chiang Mai

regards Worgeordie

[Guderian]

Meanwhile, at the TT exchange booths.....

 

 

.....it seems that everywhere else has had a worse fall in its economy than Thailand, at least to judge by their currencies relative to the Baht.

Edited February 15, 2021 by Guderian

[vivananahuahin]

There is a speculation on the baht,if they cannot stop this the helicopter money will be used and the future will be uncertain for the currency.

[mr_lob]

24 minutes ago, worgeordie said:

Not just Thailand, I think the whole World is in deep sh*t.

the only upside is the sky* and seas are clearer.

*not in Chiang Mai

regards Worgeordie

Apart from China....

Funny that....

[natway09]

I think a lot of people bagging the Thai ecomomy should have a look at many other countries devastation & the trilions of $ being spent by them just to enable them to stay solvent..

This country has a unique blend of exports (which are still happening. albiet slower) which will enable a balance of payments to still stay in the black, more than most.

[Daveyh]

42 minutes ago, Guderian said:

Meanwhile, at the TT exchange booths.....

 

 

.....it seems that everywhere else has had a worse fall in its economy than Thailand, at least to judge by their currencies relative to the Baht.

Someone must be financially supporting the economy here ....... it can not go on for much longer. Tourists will not return anytime soon that's a fact. My first suspicion is China as their economy seems buoyant, even though the pandemic was first diagnosed in Whuhan. I suspect  Thailand will be in indebted to them & is guaranteed to end all the smiles in future years ....... hopefully I've read it wrong completely & the Baht will weaken. 

[Cake Monster]

5 hours ago, webfact said:

In 2020, the economy contracted 6.1%, the biggest fall since 1998, during the Asian financial crisis.

I personally find this figure hard to swallow.

Tourism is down by 14% or so due to the lack of Foreign Tourists. Exports are down 10 % Yon Y,. Rice prices are down 17% and a load of other Agro Product is also down

Add to this a reported 10 % reduction in Car Exports.

How has a figure of only 6.1 % of GDP been derived.

Does not Compute .

Edited February 15, 2021 by Cake Monster

[chang1]

5 hours ago, webfact said:

Economists in a Reuters poll had forecast the economy would shrink 5.4% year-on-year and grow 0.8% quarter-on-quarter.

These figures don't make sense especially the ones above. The economy is shrinking and growing at the same time. TAT may have massaged them. 

-5.4 = 0.8 x 4

Edited February 15, 2021 by chang1

[Chiang Mai Bill]

I remember in 2009 when I first came to Thailand reading that the Tourism Minister stated that Tourism only amounted to 11% of Thai GDP and the financial benefit to Thailand was almost irrelevant!

 

Over recent years that 11% did increase slightly -- however, now it seems that this small financial benefit to the Thai economy is much more important!

 

This country needs politicians and economists that are truthful and well educated -- perhaps I just mean ''intelligent''!

[skorp13]

Worst economic decline in decades yet the baht continues to strengthen all in an effort to hopefully allure international tourism later this year LOL

Edited February 15, 2021 by skorp13

[Jimbo2014]

I dont see anything different to any other year.  We start the year with hugely optimistic expectations of growth and amazing economic performance.  Come February we start the inevitable reductions which go on for most of the year.  By around November we try to forget what a horrible year its been and start with the next years hugely optimistic plans of economic Nevada.   Junta's just arnt that great at growing economies.  They buy submarines when they should be investing in infrastructure.  They buy helicopters when they should be buying tractors to remove crop stubble so it doesnt get burnt.  They buy guns when they should be investing in the quality of education. ????

[fondue zoo]

3 minutes ago, Jimbo2014 said:

They buy submarines when they should be investing in infrastructure.  They buy helicopters when they should be buying tractors to remove crop stubble so it doesnt get burnt.  They buy guns when they should be investing in the quality of education.

That's the catch though. You don't get to keep buying submarines, helicopters, troop transports and guns if you don't keep buying submarines, helicopters, transports and guns...

[from the home of CC]

1 hour ago, Guderian said:

Meanwhile, at the TT exchange booths.....

 

 

.....it seems that everywhere else has had a worse fall in its economy than Thailand, at least to judge by their currencies relative to the Baht.

personally I believe the Baht is going to rise, especially if closer ties with China occur. The rest of the world, not so much..

[10baht]

1 hour ago, mr_lob said:

Apart from China....

Funny that....

Make believe economy

[gwynt]

1 hour ago, worgeordie said:

Not just Thailand, I think the whole World is in deep sh*t.

the only upside is the sky* and seas are clearer.

*not in Chiang Mai

regards Worgeordie

Exclusion of China,,!!

[johnarth]

many people are queuing up at a bank here in Trat, what the people are saying is the bank is broke, I think the bank has internet problems and people have to go to the bank to get money

[spidermike007]

And those are official numenrs, which likely do not account for the massive cash market economy here. It is likely closer to a 15% contraction. 

[Isaan sailor]

• All nations have COVID-19 pandemic.

• Most nations economies have taken a real hit  (including Thailand).

• Some nations have instituted stimulus 

programs to help their economies (including Thailand)

Very few nations have seen their currency rise from COVID-19 (including Thailand)

I think their problem is obvious.

[Isaan sailor]

2 hours ago, mr_lob said:

Apart from China....

Funny that....

Yes, how curious.  During this pandemic, it seems the Baht and the Chinese Yuan march upwards each day to new and glorious heights.  Did they peg the Baht to the Yuan?

[Mr Meeseeks]

2 hours ago, amdy2206 said:

And the government continues to purchase weapons and items for the Army, Navy & Airforce, and sure to carry on getting all of their perks despite the rest of the country becoming more poverty stricken by the day.

Everyone knew there would be no oversight or accountability under a military regime, yet they still tolerate it, some even openly supporting it.

 

For whatsoever a man soweth, that shall he also reap.

[Fex Bluse]

6 hours ago, webfact said:

Thailand downgrades economic outlook despite smaller fourth quarter GDP fall

By Orathai Sriring and Kitiphong Thaichareon

 

FILE PHOTO: People visit shopping center to celebrate New Year Eve during the coronavirus disease (COVID-19) outbreak in Bangkok, Thailand December 31, 2020. REUTERS/Soe Zeya Tun

 

BANGKOK (Reuters) - Thailand cut its estimate for economic growth this year to 2.5-3.5% after suffering its worst slump in more than two decades in 2020 due to the shock from the COVID-19 pandemic.

 

The government had previously forecast growth of 3.5-4.5% for this year, and the downward revision comes despite latest data showing the economy shrank less than expected in the October-December quarter as domestic activity and exports recovered after coronavirus restrictions were eased.

 

The vital tourism sector remains in limbo because of international travel restrictions, and a COVID-19 outbreak in December has dealt a further blow to the country's fledgling recovery.

 

Southeast Asia's second-largest economy shrank 4.2% in the final quarter of 2020 from a year earlier, after a 6.4% contraction in the previous three months, National Economic and Social Development Council data showed on Monday.

 

On a quarterly basis, the economy expanded a seasonally adjusted 1.3% in the December quarter, after a revised 6.2% expansion in the September quarter.

 

Economists in a Reuters poll had forecast the economy would shrink 5.4% year-on-year and grow 0.8% quarter-on-quarter.

 

Somprawin Manprasert, chief economist of Bank of Ayudhya, said the GDP data was not a surprise and the economy should return to pre-pandemic levels in the third quarter of 2022, slower than earlier expected.

 

"Having had a bad crash, the economy was hit on the back by the second wave, so it's difficult to recover," he said.

 

The main stock index rose 0.6% after the GDP data while the baht gained slightly to 28.83 per dollar.

 

In 2020, the economy contracted 6.1%, the biggest fall since 1998, during the Asian financial crisis.

 

Thailand had largely contained the spread of coronavirus by mid-2020 but new cases detected in December have led to infections across the country and slowed consumption and domestic travel.

 

The NESDC now expects exports, also a key driver of growth, to rise 5.8% this year, rather than expand 4.2%.

 

But it also forecasts just 3.2 million foreign tourists this year, down from an earlier forecast of 5 million arrivals.

 

Last year, there were only 6.7 million foreign tourists versus nearly 40 million arrivals in 2019.

 

"Fiscal support will be key to underpin the recovery this year as monetary easing runs its course," said DBS economist Radhika Rao.

 

The government has supported the economy with a 1.9 trillion baht ($63.61 billion) stimulus package, while the central bank has slashed interest rates by 75 basis points last year to a record low of 0.50%.

 

($1 = 29.87 baht)

 

 

-- © Copyright Reuters 2021-02-15

 

- Whatever you're going through, the Samaritans are here for you

- Follow Thaivisa on LINE for breaking COVID-19 updates

Must be that "9%" GDP from foreign tourism... ????

 

I'm surprised their friends in China haven't helped them. ????

[Fex Bluse]

3 hours ago, amdy2206 said:

And the government continues to purchase weapons and items for the Army, Navy & Airforce, and sure to carry on getting all of their perks despite the rest of the country becoming more poverty stricken by the day.

They might be getting ready for the war their cousins to the north are instigating.. Maybe Xi told him secretly over tea to get ready.. 

[thailand49]

It doesn't add up because the theory with Thai leaders is to tell that white lie daily doing so is actually good for people. No one wants to wake up and go through the day thinking the worse thus the reason they call this the " land of smile "  those who believe it live in the " land of stupidity "  when it actually the " land of sadness "????

[bluesea]

Common sense to any economy is the currency is to high which makes exports more unattractive to Foreign Countries..

Simple answer to get the Ecomomy cracking is open the country for  Immigration & Devaluing the Baht.