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Economy Still Seen to Recover Despite New Outbreak
Published: December 29, 2020 at 4:05 pm
It sees the economy growing by at least 4% in 2021
The Thai Fiscal Policy Office remains optimistic on the economy’s prospective growth next year even though the country remains gripped by a new surge of infections of the COVID-19.
According to the FPO, the economy’s growth is buoyed by the availability of vaccines from AstraZeneca as per government deal, and improved outlooks in the exports sector. These are sectors in which the Thai economy is heavily reliant, and both are seeing positive growth in 2021 after a serious slump this year.
The Ministry of Commerce expects the exports sector to see a recovery of 4% starting next year. This is a welcome improvement after a forecast contraction of up to 7% this year due to an extended period of no exports caused by the lockdown in April.
From January to November this year, Thai exports experienced a contraction of 6.92% compared to the same period in 2019. Imports similarly dropped 13.7% in the same period as well. Both sectors valued $211 billion and $188 billion, respectively.
Thailand now has a trade surplus of $23.5 billion.
Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, the growth in exports next year will be fueled by products that are used in work-from-home arrangements, home appliances, healthcare items, and food.
The growth is also buoyed by the availability of a COVID-19 vaccine and the global recovery that it brings to various nations, he added.
Mr. Wuthipong also said that tourism should experience a recovery once sentiment and confidence among travelers improve as a result of the availability of a vaccine.
Thailand’s government had inked an agreement with the British pharma giant AstraZeneca for 26 million doses of its COVID-19 vaccine, and for transfer of technology that will allow Thailand to locally produce doses through Siam Bioscience.
However, Tourism and Sports Minister Phiphat Ratchakitprakarn is less optimistic about the prospects in tourism despite the availability of a vaccine.
Minister Phiphat said that, for now, foreign tourism in Thailand will continue to experience a slowing down as foreigners cannot enter the Kingdom without a specific purpose, or unless they sign up for the long-stay Special Tourist Visa.
Current developments are also heavily affecting the domestic tourism scene. For instance, the province of Koh Chang has seen a drop of 15% in hotel bookings as people fear the virus may spread to the province from Samut Sakhon.
This 15% drop is caused by tourists cancelling their bookings out of fear, although businesses in the province continue to stress that safety measures have been put in place by the provincial government for domestic tourists.
Amidst all this, the FPO expects the economy to grow by 4.5% next year. However, it will still contract by 7.7% at the end of this year due to the far-flung effects of the COVID-19 pandemic.
In January, the FPO is due to publish its updated economic growth forecast.