Kasikorn Research Center lowered Thailand’s economic projection again on Friday, predicting only 1 per cent GDP growth for 2021 from 1.8 per cent earlier this summer.
“Steps have been taken to halt the spread of the virus which was followed by a negative impact on economic activities,” said the research published this week.
The more contagious Delta variant has put Bangkok and other deep red-zoned provinces under partial-lockdown measures from at least 14 days.
Kasikorn analysts warned that the government’s 42-billion-baht relief schemes, introduced this week, will not entirely compensate for the overall economic impact.
According to The Federation of Thai Industries (FTI), the 14-day restrictions will cost up to 60 billion baht to the country’s economy. The situation could deteriorate further if the government fails to curb the ongoing outbreak.
The country still faces much uncertainty for the rest of the year due to several factors from outbreaks of mutated variants to the effectiveness of chosen vaccines, and slower-than-expected vaccination progress.
As a result, the research center has revised down foreign arrivals this year to a range of 250,000 – 650,000 from the previous 250,000 – 1.2 million even with the introduction of “sandbox” programs.
A research unit from Krungthai Bank also lowered its GDP projections to 0.5-1.3 per cent from 0.8-1.6 per cent.
The Bank of Thailand (BOT)
The central bank is currently reassessing its economic outlook as the partial-lockdown has led to higher downside risks to the economy.
The latest projection from BOT in June stood at 1.8 per cent growth for 2021.
Before adjusting the economic outlook again, “The central bank needs to monitor the the spread of the Delta variant, the number of infections, and the government’s additional measures,” said senior director Chayawadee Chai-Anant.
The large number of infections may cause a delay in herd immunity, the country’s reopening timeline, and economic recovery, she added.