Thailand: COVID concerns weigh on growth outlook – UOB

Economist at UOB Group Barnabas Gan comments on the latest GDP figures in Thailand.

Key Quotes

“Thailand’s GDP fell 2.6% y/y (+0.2% q/q sa) in 1Q21, beating market estimates for a deeper contraction of 3.3% y/y (-1.0% q/q sa)… Nonetheless, Thailand’s GDP has contracted for five straight quarters since the start of COVID-19 in 1Q20.”

“Growth outlook for Thailand in 2021 will depend on three key factors: (1) COVID-19 environment, (2) tourism demand and (3) global trade backdrop.”

“In a nutshell, Thailand’s economic prognosis has clearly worsened since the start of 2021. Renewed COVID-19 risks remain to be the key drag to economic performance, considering the negative impact it could have on Thailand’s tourism, labour market and domestic consumption. Notwithstanding the strong rebound in GFCF in 1Q21, further exacerbation of COVID-19 risks in Thailand may also affect investor confidence in the year ahead. We note that Thailand’s economy continues to be very dependent on both tourism and trade, and any unexpected worsening of COVID-19 infections and/or a slowdown in global trade would inject downside risks to Thailand’s growth momentum in 2021. While we keep our full-year growth forecast at 1.5% in 2021, we note that there could still be downside risks to our outlook should COVID-19 infections continue to stay elevated within Thailand’s shores.”