Private sector ups 2021 GDP forecast as Thailand’s Covid-19 situation improves
A joint private sector committee has adjusted Thailand’s estimated gross domestic product (GDP) growth for this year to between -0.05 and 1 per cent, higher than the previous estimate of -1.5 to 0 per cent.
The committee is comprised of three private sector organisations, namely the Thai Chamber of Commerce, Federation of Thai Industries (FTI) and Thai Bankers’ Association (TBA).
“The committee estimates that exports this year will expand 12 to 14 per cent due to a recovering world economy and the government’s support of the business sector. The general inflation rate is estimated at 1 to 1.2 per cent,” said Payong Srivanich, TBA chairperson who led the committee’s virtual meeting on Tuesday.
“Comprehensive distribution of Covid-19 vaccines among labourers and free availability of rapid test kits will effectively control infections in the manufacturing sector.
“If the daily infection rate continues dropping and Thailand can procure more vaccines, lockdown measures should be eased from September,” he added.
“Thailand’s recovery for the rest of the year will depend on two important factors: Protecting the supply chain of the manufacturing sector from an outbreak among workers and the government’s economic stimulus measures like co-payment shopping schemes and promotion of tourism during the high season to boost local spending.”
However, he said, if the Covid-19 situation worsens, these measures will likely not be launched, and the country’s economy will spiral back into recession.
As for the official 3-5 per cent estimate of GDP growth in 2022, the committee said this was too low and that the government should aim for a more challenging target of 6 to 8 per cent. It said the 6-8 per cent target would be easily achievable once more than 50 per cent of the population is fully vaccinated.
“The government should also increase the ratio of public debt against the GDP from 60 per cent to 70-80 per cent, which will allow some 1.5 trillion baht to be added to the economy,” Phayong said. “The government, meanwhile, should continue to promote employment and ensure that small and medium enterprises have access to the 150-billion-baht fund so they can stay afloat if the outbreak lasts longer than estimated.”