By Linda Khoo
BANGKOK, May 18 -- Thailand’s Gross Domestic Product (GDP) shrank by 1.8 per cent in the first quarter from a year ago as the COVID-19 pandemic hit tourism sectors and reduced business activities.
It was the deepest contraction since the fourth quarter of 2011 when there was flooding in the country.
The National Economic and Social Development Council (NESDC) also slashed its forecast for 2020 GDP to a contraction of 5.0 to 6.0 per cent from growth of 1.5 per cent to 2.5 per cent projected in February.
NESDC secretary-general Thosaporn Sirisamphand said Thailand’s economy would be hit hardest in the second quarter as major businesses and venues were closed to curb the COVID-19 spread.
“The economy is expected to gradually recover in the third and fourth quarters as some businesses have already resumed operations,” he said.
NESDB also revised the fourth quarter 2019 GDP to a 0.2 contraction from 0.2 per cent growth, which means the economy has slipped into a technical recession.
On Sunday, Thailand kicked off its second phase of relaxation where businesses and venues including department stores, shopping malls and community malls resume operations.
Thailand’s economy, which is heavily reliant on tourism and trade, has been hit hard by the COVID-19 pandemic as the government imposed a ban on passenger flights starting April 4 and it has extended this until end of June to contain the spread of the deadly virus in the kingdom.
The Tourism Authority of Thailand projected the number of foreign tourists would plunge to 14 million to 16 million foreign visitors this year, the lowest in 14 years as COVID-19 hits global travel.
In January to March this year, foreign visitors in Thailand slumped 38 per cent to 6.69 million. Tourists from China, the major source of tourists, dropped 60 per cent to 1.25 million.
Last year, Thailand recorded 39.8 million foreign tourist arrivals. The country’s tourism receipts hit 1.93 trillion baht (100 baht = RM13.64), or 11 per cent of GDP, in 2019.
Economists expect the Bank of Thailand to cut its policy rate from a record low of 0.75 per cent this Wednesday.
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