Economy on course for growth, says deputy PM

Economy on course for growth, says deputy PM

Covid rules relaxation, 5-year-high investment pledges should help, says Supattanapong

People shop at Future Park Rangsit mall in Pathum Thani province on Tuesday after Covid-19 restrictions were eased early this month. (Photo by Apichit Jinakul)
People shop at Future Park Rangsit mall in Pathum Thani province on Tuesday after Covid-19 restrictions were eased early this month. (Photo by Apichit Jinakul)

The economy should grow this year, picking up pace in the third and fourth quarter, after the easing of tougher restrictions to contain the country's biggest coronavirus outbreak, a deputy prime minister said on Thursday.

The restrictions, imposed in July and August, have been eased from this month to help a flagging economy, with tourism still struggling.

"After the relaxation of curbs, growth in the third and fourth quarter should be good and the result should be positive this year. Next year, the growth rate will increase," Deputy Prime Minister Supattanapong Punmeechaow, who is in charge of economic matters, told a virtual business seminar.

"There is light at the end of the tunnel," he said.

In August, the state planning agency cut its 2021 economic growth forecast to 0.7-1.2% from 1.5-2.5% due to the outbreak.

Consumption has improved since the easing, along with ongoing government assistance measures for households and businesses, Mr Supattanapong said.

The government is ready to offer more support measures as it still has about 400 billion baht available under a 500-billion-baht borrowing plan, he said, adding public debt was not too high compared with other countries.

Also, overall Thai and foreign investment applications are expected to reach 600 billion baht this year, a five-year high, he said.

Thailand has gradually reopened to foreign tourists, but it will take time to fill an "income hole" caused by the slump in tourism, Mr Supattanapong said.

"I'm still confident that the economy will gradually grow with the help of all sides. It's a challenge because of the income hole," he said.

The optimism came after a survey found on the same day Thai consumer confidence had dropped to a record low in August, hurt by stricter measures to contain the country's biggest coronavirus outbreak and an economic slowdown.

The consumer index of the University of the Thai Chamber of Commerce fell to 39.6 in August from 40.9 in July, also dented by political uncertainty amid growing anti-government protests.

However, consumers hoped the economy would recover in future after the easing of outbreak curbs, university president Thanavath Phonvichai told a briefing.

"We have seen no direction of whether confidence will improve, but people have more hope for the future," he said, adding more vaccines expected later this year together with a decline in infections were positive factors.

The economy should show signs of recovery after the relaxation of restrictions, helping bolster consumer confidence, Mr Thanavath said.

The economy is now expected to expand 0% to 2% this year, better than a previous forecast of 0% growth to a 2% contraction, he said.

Growth shrank 6.1% last year, its deepest slump in over two decades, with tourism devastated by the pandemic.

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