The Thai economy is projected to recover and record growth of 2.8% next year from a 6.3% contraction this year, according to the latest forecast by the University of the Thai Chamber of Commerce (UTCC).
UTCC president Thanavath Phonvichai said next year's growth would be driven by the availability of a Covid-19 vaccine, an export recovery and a return of foreign tourists.
Mr Thanavath said Thailand is expected to have a Covid-19 vaccine by the second half of 2021, with exports set to expand by 3.5% next year, with an inflation rate of 1%.
The forecast assumes a foreign exchange rate of 30.40 baht per dollar, and the Dubai crude oil price averaging US$44.2 per barrel.
He said next year's economy would be helped by the government's consumption stimulus measures, including the extension of the popular co-payment scheme.
"The government needs to continue economic stimulus measures to raise domestic spending during the first and second quarter next year, as well as tourism stimulus measures in the third and fourth quarter to assist the economy in rebounding to growth in 2021," said Mr Thanavath.
This year Thai exports are expected to shrink by 7.4%, with the inflation rate at -0.9%, he said.
Mr Thanavath said there is weak demand for Thai exports not only because of the pandemic, but also due to the stronger baht and a container shortage.
The container shortage has intensified since June after China announced an easing in its lockdown measures and Vietnam ramped up its exports. The spread of the pandemic worldwide also resulted in a number of containers becoming stranded in the US and Europe.
More importantly, demand for containers, particularly for shipments bound for the US and Europe, surged ahead of the year-end and New Year holidays. The private sector estimated Thailand is facing a shortage of over 1.5 million containers this year. Container demand stood at 5 million in 2019.
Mr Thanavath predicted exports would stay sluggish in the first quarter of 2021, suggesting the government inject additional funds of at least 100 billion baht to offset lower exports during this period. He said the economy is likely to start recovering in the second quarter.