The Bank of Thailand (BoT) predicts that economic recovery will be delayed to the first quarter of 2023, mainly due to the third wave of infections, while vaccination is a key factor to reviving the Thai economy.
The Covid-19 outbreak has brought about a public health crisis and battered the economy and local businesses, especially small- and medium-sized enterprises (SMEs) and retailers for around one and a half years.
Thailand's GDP contraction ranked almost the highest in the region in 2020. At the same time, new infections have since climbed and vaccine distribution remains uncertain.
"Given this uncertain scenario, the central bank expects that economic recovery to take more time than it earlier projected. The recovery is expected to occur in the first quarter of 2023," central bank governor Sethaput Suthiwardnarueput said at a webinar jointly hosted by the BoT, the Thai Bankers Association and The Mall Group yesterday.
The outbreak has emerged in Thailand in three waves, and the government's measures to contain the contagion's spread have impacted economic activities.
The pandemic has dampened purchasing power of consumers and weakened the debt repayment ability of borrowers both individually and commercially.
Chayawadee Chai-Anant, senior director of the central bank's economic and policy department, said Thailand would have to wait until the first quarter of 2023 for the economy to recover to the same level before the Covid-19 pandemic, longer than the central bank's previous projection for economic recovery around the second to third quarter of 2022.
"The delayed recovery results from the third wave outbreak and it mainly depends on vaccination distribution. The Bank of Thailand will review the economic forecast for 2021 again in June," she said.
She said that economic activities have been suffering from the third wave in May this year while new infections have continued to increase.
According to Google mobility, however, local transportation has been starting to pick up in line with local vaccinations.