Reuters Poll Indicates a Contraction of 4% in Thai’s 1Q GDP, Lowest in 8 Years!

Ahead of the official GDP report on May 18, 2020, Reuters Poll estimated that Thai economy will contract 4% in the first quarter of 2020 after the coronavirus outbreak hit on Thai tourism hard.

 

Thai economy came to a halt in late February after the coronavirus outbreak paralyzed tourism industry and pressured domestic consumption. The estimation of 4% contraction was a median figure from 15 economists, which had not been seen since the flooding incident in 2011. The full-year GDP was estimated to decline 5.2%.

 

Thailand heavily relied on the tourism industry, which contributed around 17% to Thai GDP. However, the contribution from the tourism industry shrunk in March due to lower traffic in tourism.

 

The Ministry of Tourism and Sports released the statistic of International Tourist Arrivals to Thailand in March 2020, showed that the number of foreign tourists collapsed by 76.41% compared to the same period of last year and the revenue from tourism plunged 77.58% YoY due to a covid-19 pandemic across the world.

The outlook of the first quarter tourism situation (Jan – Mar 2020), Thailand has a total of 6.7 million foreign visitors decreased 38.01% YoY.

Besides the decline of Chinese travelers, the revenue from Chinese people has dropped by 95.8% YoY to record 2,098.42 million baht.

 

The outlook does not seem to be promising since the economy had just started to slowly come back in May.

 

Morgan Stanley stated that the economic recovery in Asia (excluding Japan) will start to recover from 1) China. 2) The Philippines, Indonesia and India. 3) S.Korea and Taiwan. 4) Thai, Malaysia, Hongkong, Singapore.

Morgan Stanley estimated that China’s economy was expected to start to recover in the third quarter of 2020, while the recovery in Thailand was expected to start in the first quarter in 2021.