The Thai economy may fare better than expected, helped by recovering domestic consumption and exports, says the Fiscal Policy Office (FPO).
Kulaya Tantitemit, acting director-general of FPO, said the Thai economy should contract less than the 7.7% the office projected in October because economic conditions are improving, as indicated by the GDP in the third quarter.
Thailand's GDP contracted by 6.4% year-on-year in the third quarter following a 1.8% decline and a 12.1% contraction in the first and second quarters, respectively. After a seasonal adjustment, the economy expanded by 6.5% quarter-on-quarter in the July-to-September period from the second quarter. In the first nine months, the economy contracted by 6.7%.
The improvement was attributed to the easing of lockdown measures and domestic travel restrictions, coupled with measures to rehabilitate the economy through fiscal stimulus.
Full-year GDP contraction was forecast at 7.7% this year by the FPO, with growth of 4.5% projected for next year.
Ms Kulaya said domestic consumption is the key driver for Thailand's economic performance this year, while exports shrunk because of the pandemic.
"Next year domestic consumption is likely to maintain its momentum from this year, helped by the government's consumption stimulus measures such as the 'We Travel Together' campaign and co-payment scheme," she said.
Ms Kulaya said domestic consumption contracted only 0.6% in the third quarter, and could expand in the final quarter.
The second phase of the co-payment scheme means an injection of 45 billion baht into the economy from January to March next year. This figure excludes 21 billion baht given to the state welfare card programme.
The cabinet on Dec 8 approved an extension of the co-payment scheme, which subsidises 50% of food and goods purchased at small shops, and the state-sponsored welfare card programme for low-income earners, adding 500 baht in monthly financial assistance to 14 million low-income earners.