Consumer spending may drop up to 100 billion baht if a new coronavirus outbreak lasts for two months, possibly sinking the economy in the current quarter, a commerce university said on Thursday.
Consumer confidence fell back to 48.5 in March after a rise to 49.4 in the previous month, according to a survey by the consumer index of the University of the Thai Chamber of Commerce.
A total of 405 new Covid-19 infections were reported on Thursday, as the country deals with a new wave of infections and the presence of a highly transmissible variant first identified in Britain.
"Sentiment is expected to drop for at least three months before picking up if the Covid situation eases quickly," university president Thanavath Phonvichai told a briefing.
He said he expected the outbreak to be controlled within two months and for consumer spending to be cut by 60 billion baht to 100 billion baht, or 0.3-0.5% of gross domestic product (GDP), he said.
There is a risk that the economy will shrink in the second quarter, rather than grow 1-2% as earlier forecast, he said.
While predicting GDP growth of 2.8% this year, Mr Thanavath said growth could be only 2.0-2.5% if the outbreak cannot be contained within two months.
The economy contracted 6.1% last year, its deepest decline in over two decades, with tourism devastated by the coronavirus pandemic.
The spike in infections came in ahead of the Songkran holiday next week and as the country is preparing to slowly reopen to foreign vacationers to help its struggling tourism sector.