Growth forecast revised down to 2.3%
The Finance Ministry's Fiscal Policy Office (FPO) on Thursday slashed its economic growth forecast for the second time to 2.3% this year from its earlier prediction in January of 2.8% and 4.5% in Oct 2020, attributing largely to the battered tourism sector due to the Covid-19 pandemic.
Kulaya Tantitemit, director-general of the FPO, said the forecast was based on assumptions that the government will come up with new stimulus measures to rehabilitate the ailing economy worth not less than 100 billion in the current fiscal year ending Sept 30.
"If the government's new economic rehabilitation measures are worth more than 100 billion baht, the FPO is set to take such figures into account in a new economic growth forecast," she said.
According to Ms Kulaya, the Thai economy is likely to recover to healthy expansion in the fourth quarter, with whole-year figures expected to stay in a range of 1.8-2.8% or an average of 2.3%.
"Although the world's recovering economy is a positive for Thai export prospects which are expected to grow by 11% in US dollar terms this year from 6.6% contraction last year, Thailand's overall economy is still feeling the pinch from a fresh wave of infections and relatively slow vaccine rollout, prompting the number of expected international tourist arrivals to plunge to only two million this year, a sharp fall from five million people earlier projected in January."
Receipts from international tourists normally contribute up to 12% of GDP. Thailand saw a plunge in foreign tourist arrivals last year because of the deadly virus outbreak.
Foreign tourist arrivals totalled just 6.7 million last year, generating revenue of about 330 billion baht, down 83.2% from 2019 when it generated almost 2 trillion baht.
According to Ms Kulaya, receipts from international tourists this year are expected to reach 170 billion baht, down from 260 billion baht projected earlier.
Referring to the 1-trillion-baht emergency loan decree designated to help ease the impact of the pandemic, she said an estimated 950 billion baht will be disbursed by the end of fiscal 2021, 340 billion of which has already been disbursed in fiscal 2020 and 602 billion expected to be disbursed in fiscal 2021. About 50 billion baht will be leftover and kept for further use in fiscal 2022.
"Thailand's fiscal status remains sound and stable as the Finance Ministry is financially ready to roll out additional fiscal steps to keep abreast of changing economic environments," said Ms Kulaya.
She said a strong push from public consumption and investment coupled with the state's commitments on the country's economic reforms focusing more on investment in infrastructure and especially digital tech and upgrading human resource skills will play a key part to help shore up the economy.