BANGKOK- Thailand’s economy likely shrank in the first quarter of this year, a Reuters poll showed on Friday, as coronavirus outbreaks in the beginning of 2021 hurt consumption and tourism, slowing the pace of the economic recovery.
Southeast Asia’s second-largest economy, which is heavily reliant on tourism, likely contracted 3.3 percent in the first quarter from a year earlier, according to the median estimate of 11 economists in the poll. It slumped 4.2 percent in the final quarter of 2020.
On a quarterly basis, gross domestic product (GDP) likely shrank a seasonally adjusted 0.8 percent in the March quarter after posting growth of 1.3 percent in the fourth quarter of last year.
The latest coronavirus outbreak, which started in April and has accounted for more than two thirds of Thailand’s total infections, has slowed domestic activity at a time the tourism-reliant country was preparing to reopen more broadly to foreign visitors.
Economists in the poll predicted full-year growth of 2.1 percent in 2021, after a 6.1 percent contraction in 2020. Analysts have slashed their forecasts in recent months from around 3 percent at the start of the year due to the outbreaks and a slow vaccine rollout.
The economy could shrink again in the second quarter from the previous quarter as most indicators remain weak, said TakitChartchredsak, economist of Asia Plus Securities.
Increased exports, a key growth driver, and recent stimulus measures have lent some support, however.
Thailand’s cabinet approved an additional economic relief package worth 255 billion baht ($8.13 billion)earlier this month to help people affected by the latest outbreak.
“A fresh fiscal thrust and export pick-up will help offset part of the impact, but the pace of turnaround this year will be slower than previously assumed,” said DBS economist Radhika Rao.
In February, the National Economic and Social Development Council, which compiles GDP data, forecast 2021 GDP growth of 2.5 percent-3.5 percent. It will give new projections on Monday.
Thailand’s industries sentiment in April hit its lowest in eight months after its biggest coronavirus outbreak struck, and the government should borrow 1 trillion baht ($32 billion) more to support the economy, an industries group said on Monday.
The Federation of Thai Industries (FTI) said its Thai industries sentiment index dropped to 84.3 last month from 87.3 in March, it said.
