Thailand recovered more slowly than other countries if it was not open to tourists.

If following the economic numbers, you will start to see more and more signs of economic recovery in some industries. Thailand has been successful in controlling the infection in the country. Government

KKP Research by Kiatnakin Phatra Downgrade the GDP growth forecast for 2021 from 5.2% to 3.4%.

The most important factor is tourism, which is expected to
Economic Outlook for 2021

When the economy lacks tourists Different resurgence in both industry and area dimensions

Each type of business was affected differently as a result of the tourist contraction. Looking back at Q2 2020 GDP data, which contracted 12.2% the most since the 1997 Tom Yam Kung crisis, and looking at the business level. We saw different impacts. The businesses that were most affected were housing and food (-50.2%), travel (-38.9%), manufacturing (-14.4%) and retail (-9.8%).

Expansion is construction (+ 7.3%), financial services (+ 1.7%) and information and communication technology (+1. KKP Research separately calculated the impact to identify factors describing the contraction that occurred in each business segment in the second quarter (Fig. 4). It found that businesses with deep contraction were among those. That rely on Tourism was high and was mainly affected by the decline in tourism. Meanwhile, the manufacturing sector with high export dependence will also suffer from the slowdown in exports. The construction business has benefited from the increased public investment, allowing it to expand.

The impact of the city shutdown was another key reason for business contraction in the second quarter, with the biggest impact on travel and transportation, retail and accommodation and food. 

As a result of the city shutdown, revenue of these businesses lost about 10%. However, in the third and fourth quarter of this year, businesses in this sector may improve somewhat after the opening of the city. But it is still in negative territory from tourists who have not returned to normal.

In 2021, the recovery will vary from business to business. From the recovery of demand in each group that is not simultaneously Businesses that rely heavily on tourists will not be able to recover much. While those that rely mainly on domestic consumption and exports (Fig. 5) such as retail, wholesale, information and communication technology And the manufacturing sector Will be able to return to some expansion according to the recovery of consumption While the construction sector may recover from government investment projects.

recover more slowly, as exposure to foreign tourists is still difficult to occur. While the economy remains projected at -9% for 2020, the economic outlook from a 9% contraction this year to just 3.4% growth next year reflects that next year’s economy is still far from returning to levels. Of economic activity before COVID-19

Economic Outlook for 2021

KKP Research lowered its economic forecast once again. As the tourism situation has not yet improved, the COVID-19 outbreak is not yet over in many areas around the world. 

The idea of ​​accepting foreign tourists to Thailand is still widely debated, and in 2020, no foreign tourists are expected to enter the country. Originally, it was expected that there would be some entry of tourists later this year, looking to 2021. Thailand will continue to face challenging challenges in opening up more tourists. Due to limitations on both the ability to detain and monitor tourists.

 Along with the development of the vaccine that is likely to be unavailable in the first half As a result, the forecast of the number of tourists in 2021 has to be changed from 17 million to only 6.

KKP Research predicts that in the base case Although domestic spending and exports can begin to recover, they won’t help the economy much. Because declining tourism receipts will continue to hinder economic growth. It is believed that the economy in the first half of the year will continue to slow. The tourists will start to return in the second half of the year. 

In addition, the Thai economy has been in a downturn since before the COVID-19 outbreak.

It is difficult for the domestic economy to expand at a high level as in the past. KKP Research has adjusted its GDP growth forecast for 2021 to only 3.4% Compared to a 9% contraction this year, the Thai economy might take 3-4 years to return to normal levels .

However, the assumptions for economic estimates are quite uncertain. In the worst case.Thailand may not be able to open a country to receive tourists at all in 2021. It will have a serious impact on both the employment and the widespread closure of the company. 

Significant increase in bad debt That will hinder domestic consumption and investment, and is a risk that will cause the economy to shrink even deeper. And may grow at a level of 0% -1% only.

shutdown measures were eased. However, considering the structure of the Thai economy that relies on tourism accounts for up to 12% of GDP and the weak Thai economy before the COVID-19 crisis, it is difficult and slow to recover.

Than many other countries in the condition that tourism has not yet returned. One of the signs that may reflect the future direction of the Thai economy is the recovery trend of the Thai stock market. By comparison, the Thai stock market has rarely recovered, while stocks in many countries have recovered closer to the pre-COVID-19 outbreak .