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Thailand has been cited as a success story in containing the coronavirus outbreak, having gone more than 40 days without any local transmission of Covid-19. Yet its economic outlook is the darkest in Asia.
Gross domestic product is forecast to contract 8.1% this year, according to the Bank of Thailand. That’s worse than official forecasts for any of the main economies across Asia, and would be the country’s biggest GDP decline ever, surpassing even its plunge during the Asian financial crisis two decades ago.
“Thailand has large exposure as a tourism hub, close to 15% of GDP, and it also has large exposure of the export-oriented sector,” said Kiatipong Ariyapruchya, senior economist for Thailand at the World Bank. “Hence the large shock to GDP.”
Analysts surveyed by Bloomberg predict the kingdom’s economy will contract more than others in Southeast Asia, at 6%, and with a weaker rebound in 2021 of 4%.
Here’s what’s weighing down the Thai economy:
The state of emergency, night-time curfew and business closings imposed across the country to fight the virus have crushed private consumption and investment, which were already on a modest downtrend last year. Purchases are expected to pick up as the lockdown restrictions are lifted and as government stimulus measures filter through to the economy, but investors could be slow to return given the gloomy prospects.