TRIS warns of sluggish recovery after Thai restrictions lifted in March
TRIS Rating expects the Thai economy to grow 2.6 per cent this year, rebounding from a 6.1 per cent contraction in 2020 – its worst performance since shrinking 7.6 per cent in 1998.
This year’s projection is based on the assumption that Covid-19 restrictions will be eased in March to allow full resumption of economic activities, said the Thai ratings agency.
“On that basis, we project the Thai economy to expand from the second quarter of 2021 onward, supported by the government’s economic relief measures and improving consumer and business sentiments as the rollouts of vaccinations are progressing worldwide,” said TRIS.
It also expects Thailand to welcome three to four million foreign tourists this year as quarantine requirements are relaxed towards the end of 2021.
However, TRIS warns that private consumption and private investment are seeing a lacklustre recovery, shadowed by the resurgence of Covid-19 and its impact on unemployment, household debt, and business liquidity. It projects private consumption and private investment will grow by 1.5 per cent and 3.7 per cent, respectively, in 2021.
Meanwhile, it forecasts public consumption and public investment will expand by 5 per cent and 8 per cent, respectively, this year.
External demands are also facing sluggish recovery with high uncertainty over the revival of tourism, it added.
It expects exports and imports to grow slightly by 0.7 per cent and 0.3 per cent, respectively, in 2021. The worldwide shortage of shipping containers should be resolved by the first half of 2021, said TRIS.
However, it expects the appreciation of the baht will likely continue to hinder the recovery of the export sector.
