Business groups see GDP contracting 3%-5% this year

Business groups see GDP contracting 3%-5% this year

People wait for financial aid near the Finance Ministry office in Bangkok on Thursday. (Reuters photo)
People wait for financial aid near the Finance Ministry office in Bangkok on Thursday. (Reuters photo)

Thailand's economy may shrink 3%-5% this year, sharply down from growth of 1.5%-2.0% projected in March, as the coronavirus pandemic hits global demand and domestic activity, a group of leading business associations said on Thursday.

The group also cut its forecast for 2020 exports, a key growth driver, to a fall of 5%-10%, from zero growth to a 2% drop, according to a joint standing committee on commerce, industry and banking.

"Any V-shaped recovery may be difficult as the outbreak is not over yet... tourism might pick up this year," Supant Mongkolsuthree, Chairman of the Federation of Thai Industries, told a news briefing.

The economy may have contracted at least 5% in the first quarter, he said. Official gross domestic product (GDP) data is due to be released on May 18.

However, the group's 2020 GDP forecast is better than a 6.7% contraction projected by the International Monetary Fund. That would be the worst since the 1997/98 Asian financial crisis.

That is because the economy is getting support from government economic steps worth billions of dollars to mitigate the virus impact, Mr Supant said.

The Bank of Thailand, which is offering 500 billion baht of soft loans to smaller businesses, said on Thursday it had lent 36 billion baht since the scheme began two weeks ago.

Thailand reported three new infections on Thursday, taking its total to 2,992. Fifty-five people have died.

The government is expected to ease restrictions further later this month, which will be good for the economy, said Kalin Sarasin, Chairman of the Thai Chamber of Commerce.

The group also said its committee will study within a month whether to support a controversial proposal for Thailand to seek membership of an Asia-Pacific trade agreement to boost its economy hurt by the outbreak.

It is also suggesting the set-up of a committee from the government and the private sector, including both supporters and opponents of membership, to work on the matter.

Last week, the cabinet shelved a decision whether the country should join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) due to widespread opposition.

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