BANGKOK- Thailand’s economy improved in the first quarter helped by stronger manufacturing, investment and exports, but a third wave of COVID-19 infections has clouded the outlook for the tourism-dependent Southeast Asian country.
The government downgraded its 2021 economic growth forecast to 1.5 percent-2.5 percent as the outbreaks crimped domestic activity amid Thailand’s slow vaccine rollout as it was preparing to reopen more broadly to foreign visitors. It had previously forecast growth of 2.5-3.2 percent, after the economy shrank 6.1 percent last year, the deepest slump in more than two decades.
Southeast Asia’s second-largest economy contracted 2.6 percent in the March quarter from a year earlier, National Economic and Social Development Council data showed on Monday, versus a forecast 3.3 percent drop in a Reuters poll.
On a quarterly basis, gross domestic product (GDP) rose a seasonally adjusted 0.2 percent in the first quarter, beating the 0.8 percent drop forecast by economists.
In the final quarter of 2020, the economy shrank 4.2 percent from a year earlier but expanded a revised 1.1 percent on the quarter.
“Output is unlikely to hold up this quarter. We expect the economy to shrink sharply as a further surge in new COVID-19 cases pushes the country back into lockdown,” Capital Economics said.
