Thailand will only see clear signs of economic recovery in the last quarter of 2021 if the current outbreak can be brought under control by the end of July, the Kasikorn Research Center said Thursday.
“The Thai economy in the fourth quarter will grow considerably if we advance vaccine distribution enough to boost household and business confidence,” said Natthaporn Triratsirikul, assistant managing director at the research centre.
If the tourism industry can resume operations, the gross domestic product (GDP) of the fourth quarter should rise by 5 per cent year-on-year, Natthaporn added.
Kasikorn has maintained its full-year GDP growth projection of 1.8 per cent under the assumption that the third wave of Covid-19 infections can be curbed within July by the mass vaccination starting this month.
However, the analysts warned that the country will be still facing four critical problems: fiscal deficit, inflation, household debt, and increasing business costs.
In the short term, fiscal deficit together with public debt would not be a matter of concern, according to Kasikorn. “But if the fiscal deficit continues to remain high, confidence in the government may dwindle,” Natthaporn said.
Rising household debt is also a threat to recovery, she said. “The soaring household debt could reach 90 per cent of GDP by year end.”
Thailand’s household debt hit an all-time high of 89.3 per cent of GDP in the fourth quarter of 2020.