Business sentiment plunged to a 33-month low in March as the sector worried that the escalating coronavirus outbreak would drag the country’s economy into a deeper contraction than Thailand saw during the 1997 financial crisis.
The University of the Thai Chamber of Commerce (UTCC) reported today business confidence dipped to 37.5 from 44.9 in February and 45.4 in January. The March reading was a 33-month low since January 2018.
Thanavath Phonvichai, president of the UTCC, said the bearish business sentiment stemmed from the unabated spread of the coronavirus, the government’s state of emergency and nationwide curfew declaration, the ordered closure of certain businesses since January and the lockdown measures introduced in many provinces nationwide.
“As far as business owners both in the capital and provincial areas were surveyed, they mutually see the impact of the virus crisis create the most serious damage to the economy since 1957 and more serious than the Tom Yum Kung financial crisis,” Mr Thanavath said.
“The deadly virus has dealt a heavy blow to almost all sectors. More importantly, it is estimated to cause hefty unemployment of about 10 million people this year.”
Nonetheless, business people are hopeful that the economy will recover in the fourth quarter if no new risk factors occur, he said.
In a related development, the university today lowered its forecast for Thailand’s economy to a contraction of 3.4-4.9% from an earlier projected 1.1% growth.
The forecast has already taken into account the government’s economic stimulus and relief measures including the latest 1.9 trillion baht-relief packages.
With the 1.9 trillion baht relief package, the economy is projected to contract as high as 8.8%.
Exports are forecast to see a deep contraction of 8.8-12%, with the inflation rate ranging from -0.5% to -1%.
The number of international tourists is projected to drop by about 30 million to only 8-12 million.