Thailand’s Q2 contraction poised to hit 13 percent

Bangkok (VNA) - Thailand's second-quarter economic contraction could reach a record of 13 percent year-on-year after business activities were halted by lockdown measures during the period, said the Bank of Thailand (BoT).

The anticipated decline would mark the lowest year-on-year growth since a 12.5 percent contraction in the second quarter of 1998 in the wake of the 1997 Asian financial crisis, said Don Nakornthab, senior director of the bank’s economic and policy department.

Overall economic activities shrank significantly in the second quarter as a result of coronavirus containment measures in Thailand and around the world, he said.

External demand contracted sharply both in the tourism sector affected by international travel restriction measures and in merchandise exports hit by weakening demand among trading partners.

Thailand's economy in the first quarter shrank for the first time since 2014, by 1.8 percent year-on-year and 2.2 percent quarter-to-quarter on a seasonally adjusted basis, as the pandemic cut off tourist arrivals and shuttered business activities.

Thailand completely lifted the lockdown on all businesses and activities on July 1 but extended the emergency decree for another month until August 31.

Five economic indicators, including exports and imports (excluding gold), domestic consumption, private investment and the manufacturing index showed improvements in June, he said.

In the event of better economic data in the second quarter with a slower pace of contraction than the existing forecast, the central bank could revise up the country’s 2020 GDP prediction to an improved contraction, Don said.

Thailand's economy is predicted to shrink by 8.1 percent this year, mainly due to the COVID-19 outbreak, according to the central bank.

The National Economic and Development Council (NEDC) will report Thailand's second-quarter and first-half economic data on August 17./.