The Thai economy is likely to see zero growth at best this year because Covid-19 infections are expected to continue rising for at least another 2-3 months and the tourism industry will not recover in the fourth quarter as projected, says an economist from Bangkok Bank (BBL).
According to Kobsak Pootrakool, senior executive vice-president at BBL and former minister to the Prime Minister's Office, the rapid spread of Covid-19 has taken a heavy toll on the Thai economy and domestic businesses nationwide.
"New outbreaks can also occur later if inoculations fail to cover the whole nation. Another risk is emerging Covid-19 variants," Mr Kobsak said.
"Covid-19 has changed consumer behaviour as people are now more likely to save money rather than spend because of the uncertainty. Government stimulus measures have done nothing to stem that uneasiness."
Bangkok Bank previously projected Thai economic growth to be 1-2% this year.
He said the prolonged outbreak is also affecting foreign travellers' confidence. Tourism accounts for 10-15% of GDP and it is unlikely to recover in the fourth quarter this year as previously expected.
Mr Kobsak said the escalating number of infections in Thailand also affects the export-oriented manufacturing sector as many factories have been forced to cease production.
In addition, the government is unlikely to provide vaccines directly to factories as the operators have demanded, he said.
In the short term, Mr Kobsak proposed the government proceed with mixing vaccines as suggested by virologist Yong Poovorawan to fight against the fast-spreading Delta variant.
He said vaccinations should be prioritised for people residing in Bangkok and surrounding areas in the next few months.
In the fourth quarter, the government should accelerate supplying as many vaccines as possible to the general public and private sectors, said Mr Kobsak.
"I recommend the government allocate a 100-billion-baht budget to purchase vaccines to inoculate Thais nationwide," Mr Kobsak said.
"This amount is much cheaper than the economic losses estimated to reach as high as 900 billion baht if the outbreak continues unabated until the end of this year."