The University of the Thai Chamber of Commerce (UTCC) has maintained its GDP prediction for 2020 at 2.8 per cent, but said that the chances of less than 2.5 per cent economic growth is higher due to various negative factors.
These factors include the spread of the coronavirus, the delay in the 2020 fiscal year budget bill, low consumer demands due to the outbreak, drought, and air pollution in major cities.
These combined factors could pull the country’s GDP down by 1.3 per cent, or around 226.7 billion baht.
The greatest effect on the country’s GDP has been the spread of coronavirus. If the situation is resolved by March, the tourism industry could recover in three months. But the loss in tourist arrivals could lower the GDP by 0.67 per cent, or 117.3 billion baht. If the problem is not resolved by May, the effect on the GDP will be even greater.
The 2020 budget bill, which, if disbursed in April would represent a six-month delay and would affect the GDP growth by 0.44 per cent, or 77.5 billion baht. Drought will take away another 0.06 per cent of the GDP, or 10 billion baht, and the PM2.5 pollution problem could take another 0.02 per cent, or 3.8 billion baht.
The UTCC has made recommendations to the government and regulators. These include to extend visa exemptions to more countries, accelerating the disbursement of the remaining 2019 fiscal budget, accelerate the investment projects of state-owned enterprises, increase loan measures from specialised financial institutions, and to keep the baht between 31.5 to 32 baht per US dollar to support export competitiveness.
On Wednesday, Thailand’s Ministry of Finance lowered its GDP projection from 3.3 per cent down to 2.8 per cent. The numbers now look more in line with other institutional predictions from the World Bank and market analysts who said that the ministry’s numbers had been too optimistic.