The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) has lowered its GDP prediction for 2020 from 2.5-3.0 per cent to 2.0-2.5 per cent, the group said Wednesday.
The JSCCIB, which is comprised of the Board of Trade of Thailand, the Federation of Thai Industries (FTI), and the Thai Bankers’ Association, cited the drop in exports and the outbreak of the new coronavirus as the main reasons for the downward projection.
“The Thai economy is experiencing both external and internal negative factors,” FTI chairman Supant Mongkolsuthree said after the meeting. “[The outbreak] will not only impact China’s economic growth in 2020 but it will impact Thailand’s export sector and tourism sector.”
Supant said that Chinese visitors account for 28 per cent of the tourism’s sector entire income. The SCB’s Economic Intelligence Center (EIC), which has recently lowered its GDP prediction from 2.7 per cent down to 2.1 per cent, said the impact from the outbreak of the virus on the tourism sector will be most apparent within this month and next month and the
Supant said that based on the scenario that the outbreak will last for 3-6 months, the tourism sector would lose around 108-220 billion baht worth of expected income. The industries that will be impacted the most are hotels, restaurants, retailers, and transportation. Its impact could also affect the exports sector as well.
Supant said the delay in the 2020 fiscal budget bill has tarnished investor and investment confidence. The outbreak and the delay coupled with severe drought, which is bringing down the purchasing power of grassroots people, and the PM2.5 air pollution problem, which is discouraging people from leaving their houses, means more risk for the economy.
TMB Analytics predicted that the impact from the outbreak, the delay in 2020 fiscal budget, and ongoing drought could cost the economy around 280 billion baht, pulling its growth down by 1.7-2.1 per cent. Its previous estimation was set at 2.7 per cent.
TMB Analytics added that the government measures to help farmers worth 63 billion baht, the soft loan measure for operators within the tourism sector, and the measures to stimulate domestic MICE tourism would only boost the economy by 0.2 per cent.