Tourism and Thailand's economy may be slow to recover, even with a comprehensive vaccine rollout, as transmission risks remain among vaccinated people and reopening does not necessarily mean a full return of foreign tourists, the World Bank says.
"We expect a relatively slow return of tourism, which will undoubtedly delay Thailand's recovery of GDP growth," said Kiatipong Ariyapruchya, senior country economist for Thailand at the World Bank.
"It is important to note reopening does not necessarily mean that tourists will return, as there might be other reasons they choose to stay at home, such as a lack of incentives or infection risks."
In the "World Bank East Asia and Pacific Economic Update" that was released yesterday, the international body warned of a slow recovery, with output remaining below pre-pandemic levels until the end of 2022, despite a recent bounce back in Thai capital markets.
The World Bank downgraded its 2021 GDP growth projection for Thailand from 4% to 3.4%, which is still higher than the Bank of Thailand's estimate of 3%, but lower than the average for Asean-5 countries of 4.8%.
For 2022 and 2023, the World Bank predicts Thailand to grow 4.7% and 3.9%, respectively. In comparison, Thailand's GDP shrunk 6.1% in 2020.
Thailand's slow vaccine rollout could pose economic risks, according to the report, as getting high numbers of people vaccinated all around the globe is paramount to preventing the spread of new, more deadly, infectious or treatment-resistant variants.
The report estimates a slow vaccine rollout could lower some countries' GDP growth by as much as 1%.
"The longer it takes to stem new infections, the greater the risk of new variants emerging that turn out to be more infectious, and likely in some instances to be resistant to the vaccine," said Aaditya Mattoo, chief economist of the East Asia and Pacific Region of the World Bank.
"There is huge inequality in access to vaccines around the world and even in an optimistic scenario developing countries will only be able to vaccinate at most half of their population this year."
Thailand ranks second lowest in Asean in terms of vaccinations, with only 54,000 people vaccinated or 0.08 vaccinations per 100 people as of March 17, behind only Vietnam.
Despite its deadly crackdown on civilians nationwide, Myanmar has managed to vaccinate almost twice as many people as Thailand.
However, the report acknowledges that countries where the virus is contained, particularly Vietnam and China, have more wiggle room to assess the efficacies of each vaccine and hold off on mass vaccination until it is clear the health effects and resistance to variants of each brand.
Vaccinations may not be the only factor limiting Thailand from reopening to foreign tourists, said Mr Kiatapong.
"If other factors regarding reopening take longer than expected, they should be decoupled from the vaccine rollout," he said.
"The vaccine is important to protect against the disease and health risks, though while people are protected when vaccinated, it does not necessarily prevent transmission of the virus."
The report also warned of increasing inequality globally and locally as a result of Covid-19, through lockdowns that disproportionately affect blue collar and informal workers, while access to government services remains difficult for the poor and those without internet access.
While the Thai government's fiscal position remains intact with a manageable debt-to-GDP ratio of 56.6% and high current account balance of 4.3%, the World Bank cautioned that private debt could cause issues for the Thai economy, with domestic credit in the private sector at 120% of GDP.