BANGKOK- Thailand’s economy is expected to contract between 5 percent-8 percent this year, deeper than the 3 percent-5 percent contraction projected in May, due to the impact of the coronavirus outbreak, a group of the country’s leading business associations said yesterday.
Despite the easing of virus restrictions, most economic indicators declined in May and June, weighed by the weak purchasing power of households and businesses, while tourism remains under pressure, according to a joint standing committee on commerce, industry and banking.
“The economy is not good yet and job losses will increase,” Kalin Sarasin, chairman of the Thai Chamber of Commerce, told a briefing. “Although businesses started to reopen, there is no income yet”.
The business group now predicts exports will drop by 7 percent-10 percent this year, rather than a 5 percent-10 percent declined forecast earlier.
The group said it was worried about a recent rise in the baht, which is likely to appreciate further.
The group said it was still pushing the government to take part in Asia-Pacific trade agreement talks to boost the economy, amid widespread opposition.
Meanwhile, Thailand’s parliament began debate yesterday on a budget bill that projects a larger 623 billion baht ($20.14 billion) deficit for the 2021 fiscal year starting Oct. 1, as the government tries to revive an economy hit badly by the coronavirus.
“The Thai economy remains highly uncertain and may perform worse than forecast if the COVID-19 outbreak continues,” Prime Minister Prayuth Chan-ocha told the House of Representatives, which plans to debate until Friday.
The 623 billion baht deficit, accounting for 3.7 percent of GDP, is up from the 523 billion baht planned in January, and 32.8 percent higher than the previous fiscal year.
The government expected revenue to fall by 100 billion baht in the next fiscal year. The budget gap was increased by the same amount in late March, when Thailand imposed restrictions to curb the outbreak, Budget Bureau chief Dechapiwat Na Songkhla told Reuters.
The bill still projects spending of 3.3 trillion baht, up 3.1 percent from the previous year.
The budget plans for government investment of about 675 billion baht, up 4.7 percent from the previous year, and slightly lower than the 693 billion baht estimated in January.
The bill’s second and third readings are expected in early September, Dechapiwat said. It will also needs senate and royal approval.
The budget planners have assumed the economy will grow 4.0-5.0 percent in 2021. — Reuters
