BANGKOK – Thailand’s economy has contracted at the fastest pace in more than two decades, reflecting the lack of tourists and exports due to COVID-19, according to data released Monday by the government’s economic planning agency.
Real gross domestic product fell 6.1% in 2020 compared to the previous year, according to the Office of the National Council for Economic and Social Development.
This was the third year that Southeast Asia’s second largest economy has shrunk in recent times. The economy shrank 0.7% in 2009 due to the global financial crisis and 7.6% in 1998 amid the Asian financial crisis.
The kingdom saw a 4.2% drop in GDP for the quarter ended December compared to the same period in 2019. On a seasonally adjusted quarterly basis, the economy grew 1.3% during the quarter. three months, after a growth of 6.5% in the quarter ending September.
Technical recovery is defined as two consecutive quarters of seasonally adjusted economic growth.
Exports accounted for a large part of the economic damage. Exports of services, which include spending by non-residents such as tourists, fell 60.0% in 2020 compared to 2019. Thailand’s borders remain closed to most tourists. Merchandise exports were also weak, falling 5.8% due to slow global demand.
Private consumption spending fell 1.0% year-on-year in 2020. Business blockades imposed by local governments to control the first wave of the virus also weighed on the results. The central government tried to support consumption by introducing travel subsidies and cash gifts, but domestic demand was not strong enough to pull the economy out of negative territory.
Since mid-December, Thailand has seen an increase in coronavirus cases, forcing the reinstatement of business closures in certain provinces. With some blockades still underway, government organizations and private research companies are reviewing their economic projections for 2021.
The Office of the National Council for Economic and Social Development was no exception. He announced Monday that he had revised his forecast to 2.5-3.5% growth. In November 2020, the agency saw the Thai economy grow in 2021 by between 3.5% and 4.5%.