Thai economy may grow 3-4pct this year after COVID-19 reemerges FinMin

23-Jan-2021 Intellasia | Reuters | 6:02 AM Print This Post

Thailand’s economy could grow 3-4 percent this year, less than earlier forecast, following its biggest coronavirus outbreak yet, while the key interest rate should remain low to support domestic activity, the finance minister said on Thursday.

Southeast Asia’s second-largest economy will be helped by government stimulus and exports, while the outbreak should be contained by March and vaccines will be administered starting next month, Arkhom Termpittayapaisith told Reuters in an interview.

“If the outbreak is contained, the impact may not be much,” he said. “Growth of 3-4 percent should be satisfactory,” he added. “The worst case should be 3%”.

The World Bank here predicts GDP growth of 4 percent for Thailand this year.

The export and tourism-reliant economy is also expected to grow in the first quarter from a year earlier, Arkhom said.

With coronavirus cases tripling since last month, the government on Tuesday approved $7 billion of additional stimulus, which Arkhom said could lift growth by 0.5-0.6 percentage point this year.

Tourism is far from recovering, but exports should grow about 3 percent this year after last year’s decline, Arkhom said.

The ministry in October forecast GDP growth of 4.5 percent in 2021, with exports up 6%.

The economy likely shrank 6 percent in 2020, the deepest in over two decades, with a decline of 3-4 percent in the December quarter, Arkhom said.

The government’s 1 trillion baht ($33.4 billion) borrowing plan should be enough to help ease the virus impact, but there is room to borrow more, Arkhom said, adding the government was open to foreign loans.

The ministry is considering relaxing rules on the central bank’s 500 billion baht soft loans to help smaller firms and plans to extend a property tax cut for another year, he said.

With the baht up nearly 11 percent since April, the central bank should ensure the currency is stable so companies can plan their business, Arkhom said, while the policy interest rate, now at a record low 0.5%, was appropriate.

“The rate is very low and should remain at this level for a while to ensure that our economy fully recovers,” he said. ($1 = 29.92 baht)


Category: Thailand

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