BANGKOK – Thailand’s economy has shrunk at its fastest pace in more than two decades, reflecting a lack of tourists and exports due to COVID-19, according to data released on Monday by the government’s economic planning agency.
According to the office of the National Economic and Social Development Council, real gross domestic product shrank by 6.1% in 2020 compared to the previous year.
This was the third year that South Asia’s second largest economy has been contracting recently. The economy shrank by 0.7% in 2009 due to the global financial crisis and 7.6% in 1998 amid the Asian financial crisis.
The kingdom reported a 4.2% decline in GDP for the quarter ended December, compared to the same period in 2019. On a seasonally adjusted quarter-on-quarter basis, the economy grew by 1.3% for the three months, to 6.5% growth for the quarter. end of September.
A technical recovery is defined as two consecutive quarters of seasonally adjusted economic growth.
Exports accounted for a large part of the economic damage. Services exports, which include spending by non-residents such as tourists, fell by 60.0% in 2020 compared to 2019. Thailand’s borders remain closed to most tourists. Exports of goods were also weak, declining by 5.8% due to slow global demand.
Private consumption expenditure fell by 1.0% by 2020 compared to the year 2020. Close enterprises set up by local governments to control the first wave of the virus also weighed on the results. The central government tried to support consumption by introducing travel subsidies and monetary donations, but domestic demand was not strong enough to push the economy out of a negative territory.
Since mid-December, cases of coronavirus have increased, forcing the repositioning of business stoppages in certain provinces. As some barriers still exist, government organizations and private research firms are reviewing their economic projections for 2021.
The office of the National Economic and Social Development Council was no exception. He announced on Monday that he had revised his forecast to 2.5-3.5% growth. In November 2020, the agency saw that the Thai economy will grow between 3.5% and 4.5% by 2021.