With tourism hit by Covid-19 outbreak, ‘no growth engine available’

The research explained reduction in exports and government spending as the reasons for the growth slump.
In 2019, total GDP growth was 2.4 per cent, down sharply from 4.1 per cent in 2018.
Moreover, tourism and the service sector were the only economic drivers in the last quarter. It grew 4.1 per cent from 2018, while the industrial and agricultural sectors decreased by 0.9 per cent and 1.6 per cent respectively.
KKP research said that no engine of growth is available after tourism has taken a beating because of the novel coronavirus outbreak.
Thailand’s exports in the fourth quarter of 2019 decreased by 3.6 per cent, while imports were down by 8.3 per cent. This caused net exports to expand in the quarter, though it was not a good sign for Thai economy, since it meant a slowdown in production, investment, and purchasing power of domestic people.
In addition, the government’s spending reduced by 0.9 per cent, and its investment decreased by 5.1 per cent, compared to 2018.
The government’s economic situation was a result of a delay in passing the budget act 2020, which decreased sharply the disbursement rate of the budget.
Meanwhile, Tisco analysts announced on Tuesday (February 18) they would lower GDP estimates for 2020 from the previous 2.6 per cent to 1.7 per cent.
Also, the analyst predicted that the Covid-19 outbreak would reduce foreign tourist numbers by 2.2 million, which could reduce GDP by around 0.6 per cent.
Besides, the drought during January and May, as well as the late enforcement of the budget act, would affect around 0.3 per cent of GDP.