Jab success supports 5% Q4 growth tally
Rosy view assumes current dose rate
The third wave of the pandemic is projected to end in July, which could support Thai economic growth of 5% in the final quarter this year if the government can maintain a vaccination rate of 400,000 doses per day, says Kasikorn Research Center (K-Research).
The government plans to vaccinate around 400,000 people daily under its mass inoculation scheme, which began on Monday.
If the administration of vaccines retains this pace, the third wave, which emerged in April this year, is expected to end in July, said K-Research assistant managing director Nattaporn Triratanasirikul.
"If the government can keep positive momentum, it could meet its goal of 100 million doses administered this year," she said.
"To achieve this target, it must not have new clusters of infections."
The current vaccination pace supports Thai GDP growing 5% in the fourth quarter year-on-year, said K-Research.
Despite a 2.6% GDP contraction in the first quarter this year, the research house predicts economic growth of 1% in the second quarter.
The Thai economy is expected to continue improving in the third quarter, partly because of a low base the previous year, in addition to mass vaccination.
Though the recovery has been fragile and uneven, K-Research maintains its projection for GDP growth of 1.8% this year.
The centre upgraded its outlook for Thai export growth this year to 9% from 7%, in line with the global economic recovery, and increased its import growth forecast to 15.5% from 10%.
K-Research also raised its growth projection for private investment this year from 1% to 3.5%, with public investment improving from 6.1% to 8.5%.
The centre slashed its domestic consumption forecast this year from 2.8% to 0.9%, while keeping its foreign tourist arrival estimate in a wide range of 250,000 to 1.2 million, depending on vaccination progress, the Phuket sandbox scheme and the country's reopening, said Ms Nattaporn.
K-Research surveyed 300 retail borrowers about the impact of the third wave and found 26.6% of respondents indicated less ability to repay debt in the second quarter this year, a gain of 7.8 percentage points from the first quarter.
Given this scenario, the research house forecasts the non-performing loan ratio of the banking industry to increase to 3.2-3.5% this year from 3.12% last year.