BANGKOK: Thailand’s economy contracted at a slower pace in the third quarter, with the contraction limited to 6.4% thanks to a rebound in domestic activity after coronavirus restrictions were eased, but the ongoing travel ban kept most foreign tourists away.
Data released Monday by the National Economic and Social Development Board (NESDB) showed a marked improvement from the June quarter, when the economy suffered a 12.1% decline, the biggest drop in more than two decades.
On a quarterly basis, the economy expanded by a seasonally adjusted 6.5% in the September quarter, the fastest pace in more than eight years, after a record 9.9% contraction in the previous quarter.
Economists polled by Reuters expected the economy to contract 8.6 percent year-on-year and grow 3.8 percent on the quarter.
As a result, the government raised its forecast for 2020 for a 6.0% contraction from a previous forecast of 7.3% -7.8% decline. It now expects exports to drop 7.5% this year, instead of down 10%.
The promotion came amid a slump in tourism, tepid and dulled global demand, and months of domestic political protests.
“The third quarter data was quite a surprise, but the economic picture has not changed, and we expect a decline until the first quarter,” said Thamarat Ktsyribat, an economist at Tesco Group.
While Thailand has removed most restrictions as domestic infections slowed, its economy continues to suffer from weak global demand and an absence of foreign tourists. It began last month to allow some foreign visitors to return.
“The increasing trend in the number of Covid-19 cases worldwide during the winter season in the Northern Hemisphere will subject the economy to the next two quarters,” said Copcidthi Silpachai, head of capital markets research at Kasikornbank.
On Monday, the commission said it expects 6.7 million foreign tourists to arrive in Thailand this year – Between April and early October there wasn’t anything – After last year it recorded 39.8 million with spending representing 11.4% of GDP.
It expects 5 million foreign visitors only in 2021.
The government bolstered the economy with a 1.9 trillion baht stimulus package, while the central bank cut interest rates by 75 basis points this year to a record low of 0.50%.
The main stock market index rose 1.37% at 0340 GMT while the duller changed slightly at 30.14 per dollar.