World Bank Projects Thai 2021 Economy to Rebound to 4%, but Outlook Remains Uncertain

Thailand’s economy shows a gradual recovery sign over the next two years, the World Bank projects GDP growth this year to rebound to 4%, however, the outlook remains highly uncertain.

 

“Covid-19 has severely affected the Thai economy, which was already weakening even prior to the global outbreak. While signs of improvement have emerged in the most recent data, the second wave of COVID-19 cases could constrain domestic demand in the near-term.” according to the World Bank’s Thailand Economic Monitor January 2021: Restoring Incomes; Recovering Jobs report.

 

Following an estimated global growth of 4% this year, Thai economy is projected to rebound to 4% in 2021 and pick up further to 4.7% in 2022, mainly driven by a recovery in domestic demand and supportive fiscal policy. On the other hand, an overall economic outlook still remains unsettled due to risks from external and domestic sources, and if the global pandemic continues escalated, or the Thai government is inefficient or lack of capability in control the Covid-19 outbreak, economic activity could continue to be disrupted by strict measures to contain outbreak. 

 

Also, the World Bank stated that the premature removal of fiscal and financial relief could also hinder Thailand’s recovery which could lead to downside risks due to financial vulnerabilities, a resumption of trade tensions and supply-chain disruptions, and political unrest. 

 

“Covid-19 may also have longer-term scarring impacts on potential output, including through its effects on the labor market.” said the report.