Thailand recession deepens with biggest GDP decline since 1998

Bloomberg

Thailand’s economy contracted the most in more than two decades, deepening its recession as the nation’s key drivers of trade and tourism remain hobbled by the global coronavirus pandemic.
Gross domestic product (GDP) shrank 12.2% from a year ago, the National Economic and Social Development Council said on Monday, its biggest decline since the Asian financial crisis in 1998. The figure wasn’t quite as bad as the median estimate of a 13% contraction in a Bloomberg survey of economists.
The outlook for Thailand’s economy this year is the most dire in Asia given its reliance on exports and tourism, both of which have suffered heavy blows amid the Covid-19 outbreak. The pain has been compounded by the strong baht, which gained more than 6% in the April-June quarter, the second-best performing currency in Asia tracked by Bloomberg.
“We are concerned about the economy, especially employment, bad debts” and small and medium enterprises, said Thosaporn Sirisumphand, secretary general of the economic council.
“Government spending will remain the key economic driver this year, as all other drivers remain weak.”
The council cut its full-year forecast to a 7.3%-7.8% contraction, from an earlier estimate of a 5%-6% fall. That forecast, which assumes the virus outbreak is contained in the fourth quarter of the year and there’s no big second wave, is better than the 8.1% fall seen by the country’s central bank and the 8.5% decline the Finance Ministry expects.
In a separate briefing on Monday, Supattanapong Punmeechaow, the energy minister and deputy prime minister in charge of the economy, said the government will establish a center focusing on economic revival, including representatives from government agencies and the private sector.
Monday’s data reflect the fact that the economy was shut for part of the second quarter, and borders remain closed to most foreigners.