FPO upbeat on 2021 forecast

FPO upbeat on 2021 forecast

Exports and vaccine boost expected

People wear facial masks to protect against Covid-19 while on the skywalk connecting Ratchaprasong intersection and CentralWorld to Siam skytrain station. Apichit Jinakul
People wear facial masks to protect against Covid-19 while on the skywalk connecting Ratchaprasong intersection and CentralWorld to Siam skytrain station. Apichit Jinakul

Despite a new round of outbreaks in Thailand, the Fiscal Policy Office (FPO) is still optimistic about next year's economic outlook thanks to improved exports and a tourism recovery supported by vaccinations.

Exports have improved for many countries around the globe despite continuing outbreaks and Thai exports could catch this rebound trend, said Wuthipong Jittangsakul, an FPO adviser.

The Commerce Ministry forecasts Thailand's exports should recover to 4% growth next year after a contraction of up to 7% this year is anticipated.

Next year's growth would be driven largely by food, products related to working from home, home appliances, healthcare, the recovering global economy and the availability of the Covid-19 vaccine, said Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office.

For the first 11 months of 2020, Thai exports contracted 6.92% year-on-year to US$211 billion, while imports dropped 13.7% year-on-year to $188 billion, resulting in a trade surplus of $23.5 billion.

For the tourism industry, vaccine distribution in 2021 should help shore up travel sentiment, said Mr Wuthipong.

Thailand signed an advance agreement with AstraZeneca to secure its Covid-19 vaccine, as well as help with local production using technology from the British-Swedish firm.

Prime Minister Prayut Chan-o-cha said the contract was for 26 million doses, enough for 13 million people, as each person needs two shots.

In addition to supplying the vaccine to Thailand, AstraZeneca also pledged to support local mass production of doses through Siam Bioscience.

But the domestic tourism industry is projected to continue facing an extended dry spell despite a vaccine, said Tourism and Sports Minister Phiphat Ratchakitprakarn.

Foreign tourists still cannot travel to Thailand unless they have special purposes, said Mr Phiphat.

The FPO forecasts Thailand's economy will contract by 7.7% this year before recovering to 4.5% growth next year.

The think tank under the Finance Ministry is scheduled to review its economic growth forecast in January.

In November, most domestic economic indicators improved from October's figures.

Revenue collection from the value-added tax, which reflects private consumption, expanded by 2.5% month-on-month, and passenger car sales rose by 8.7% month-on-month, according to the FPO.

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