Thailand GDP estimated to shrink up to 11.4 from COVID-19

The University of the Thai Chamber of Commerce (UTCC) President,Thanawat Phonwichai (center).

The University of the Thai Chamber of Commerce (UTCC) estimates that Thai GDP this year will shrink between 9.4 to 11.4 percent due to the COVID-19 pandemic, while urging the government to inject more cash into the community and boost domestic spending through specific campaigns.

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The UTCC President Thanawat Phonwichai, said today the university’s Center for Economic and Business Forecasting (CEBF) has released its latest economic projection for this year, estimating the national GDP will shrink within a range of 9.4 to 11.4 percent due to the effects of COVID-19. This latest projection reflects a more pessimistic expectation than the center’s previous report which expected only 3.4 to 4.9 shrinkage.

The CEBF expects the export sector will shrink by 10.2 percent due to the global economic fallout stemming from COVID-19, while the import sector is expected to shrink 19.5 percent. The overall inflation rate is expected to be a negative 1.5 percent.

Despite these outlooks, the CEBF says the lowest point of the economic crisis passed in Q2, however the unemployment rate should still be closely monitored, as millions of people are expected to lose their jobs.

The center has urged the government to urgently help businesses in order to preserve jobs through faster loan approvals, and credit guarantee services by the Thai Credit Guarantee Corporation (TCG).

The CEBF has suggested the government accelerate disbursements to projects funded by the 400 billion baht Emergency Loan, to ensure such money will reach the hands of the general public as quickly as possible. The government should urgently instigate an economic stimulation campaign to boost domestic spending, as any delay will only worsen the situation. They have also recommended that the government extend its loan deferment offers for another 6 months, until Q2 2021, which is the point at which the economy is expected to recover in full force. (NNT)