The Bank of Thailand predicts domestic tourism will be weaker in May than the previous month because of the severity of the third wave.
The central bank reported the hotel occupancy rate in April was below 20% on average because of the significant decline in local travellers following the Songkran festival when the current outbreak emerged.
The hotel occupancy rate in May is expected to be below 10% as a result of the plunge in tourism.
The country's economic activity has also been sluggish after the rise in infections, and this could cause a deeper impact on domestic consumption than the second wave, said the central bank.
The bank forecasts the third wave will reduce domestic consumption, lowering Thailand's GDP in a range of 1.4-1.7 percentage points, exceeding the projected impact of 1.2 percentage points during the second wave, said Chayawadee Chai-Anant, senior director for the economic and policy department.
However, both the second and third waves are expected to have less of an impact on domestic consumption than the first wave, which was projected to decrease GDP by 2.2 percentage points, largely due to lockdown measures.
She said vaccines will play a key role in boosting people's confidence, driving economic activity and leading to the country's reopening and economic growth. The Thai recovery is dependent on the speed of the government's vaccine rollout and distribution, leading to herd immunity, said Ms Chayawadee.
The central bank estimates vaccine distribution of 100 million doses to be administered in 2021. The available vaccines comprise Sinovac, AstraZeneca, Pfizer and Moderna. Assuming that distribution level, the bank forecasts herd immunity by the first quarter of 2022.
If only 64.6 million doses are administered this year, using Sinovac and AstraZeneca, herd immunity is forecast for the third quarter of 2022.
If less than 64.6 million doses are distributed in 2021, local herd immunity would occur in the fourth quarter of 2022, said the central bank.
In the best-case scenario, where Thailand provides 500,000 to 600,000 doses per day, up from the existing 150,000, herd immunity could occur by August this year, Ms Chayawadee said.
She said because of the uncertainty of both infections and vaccines, the central bank needs to monitor all related data in assessing the Thai economic outlook. Moreover, herd immunity also depends on vaccine supply, capacity, and people's willingness, said Ms Chayawadee.
