Standard Chartered Bank lowers GDP forecast to 8% contraction
Thailand's gross domestic product will contract by 8 per cent compared to 2019, more than the 5 per cent contraction forecast earlier, reflecting the worsening outlook due to political concerns and a lack of concrete stimulus measures, Standard Chartered Bank said on Tuesday.
"While we believe the second quarter saw the worst of the Covid-19 impact on Thailand’s economy, we now expect a slower recovery ahead. Domestic activity – currently the main economic driver – remains weak, while external sources of growth are unreliable," said Tim Leelahaphan, economist, Standard Chartered Bank (Thai).
The bank pushed back its call for the next policy rate cut to the fourth quarter from the third quarter given limited monetary policy space. The bank has raised its 2021 growth forecast to 2 per cent from 1.8 per cent to reflect this year’s lower base.
"Looking ahead, we do not see a clear post-Covid development strategy for Thailand. The current crisis has exposed the economy’s heavy dependence on external drivers, particularly tourist arrivals from China. This issue will need to be structurally resolved over the medium term to ensure sustainable growth," Tim said.
