Siam Commercial Bank’s Economic Intelligence Center (EIC) has offered the most pessimistic view yet of Thailand’s 2020 economic growth, slashing its forecast from 2.7% to 2.1% after taking into account the coronavirus epidemic and the delayed fiscal budget.
The biggest impact from the outbreak of the novel coronavirus on Thailand’s tourism sector will be seen this month and next, the research unit said.
The number of foreign travellers is estimated to drop for three straight months in the better-case scenario, four in the base-case scenario and six in the worst-case assumption, resulting in a contraction of 2.5%, 4.6% or 8.1% in 2020, the EIC said.
The Wuhan coronavirus will slow China’s economy this year, threatening the global economic recovery and dealing a blow to supply chains in the period ahead. In the EIC’s base-case scenario, Thailand’s export value is forecast to shrink by 1% this year, down from 0.2% growth predicted earlier.
The EIC’s latest forecast is far below policymakers’ views. The Bank of Thailand and the Fiscal Policy Office predict GDP growth of 2.8% this year.
Apart from the Sars-like virus outbreak, the delay in the fiscal 2020 budget bill will hurt public investment in the three months to March.
The government is expected to hasten budget disbursement to shore up the economy after the budget bill is implemented. But the months-long delay can’t be completely offset, and state investment growth is now projected at 3.9% in 2020, down from an earlier 5.6% estimate, the EIC said.