Economy slows in Jan after virus outbreak but vaccines a boost

Economy slows in Jan after virus outbreak but vaccines a boost

People walk past closed shops on Khao San Road in Bangkok on Feb 15, 2021, as Thailand recorded it worst economic performance in more than two decades. (AFP photo)
People walk past closed shops on Khao San Road in Bangkok on Feb 15, 2021, as Thailand recorded it worst economic performance in more than two decades. (AFP photo)

Thailand's economy slowed in January from the previous month as the recent coronavirus outbreak hit domestic activity but the start of the country's vaccination drive should spur confidence and tourism, the finance ministry said on Wednesday.

The country has received its first vaccines against Covid-19, with inoculations set to begin in a few days.

"The vaccines should help tourism and may draw more foreign tourists in the second half of the year," Wuttipong Jittungsakul, the ministry's deputy spokesman, told a briefing.

The ministry, however, is sticking to its forecast of five million foreign visitors this year, he said, adding it will review its 2.8% economic growth outlook in April.

The number of foreign tourists plunged to 6.7 million last year from nearly 40 million in 2019 due to an ongoing travel ban to curb the outbreak. There were 7,694 foreign tourists in January, down 99.8% from the same period a year earlier, tourism ministry data showed on Wednesday. Thailand has for four months allowed in long-stay visitors who agree to undergo two weeks of quarantine.

After managing to get its first coronavirus outbreak under control by the middle of last year, Thailand is now dealing with a second wave that has spread across the country.

The economy could contract 1.5% in the first quarter of 2021 from a year earlier before gradually recovering, supported by government measures and steps to further open up the country, Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, told a separate briefing.

The economy may grow as much as 3.0-3.5% this year, after contracting 6.1% last year, he added.

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