BANGKOK (Reuters) – Thailand’s economy may shrink 3%-5% this year, sharply down from growth of 1.5%-2.0% projected in March, as the coronavirus pandemic hits global demand and domestic activity, a group of leading business associations in Thailand said on Thursday.
The group also cut its forecast for 2020 export, a key growth driver, to a fall of 5%-10%, from zero growth to a 2% drop, according to a joint standing committee on commerce, industry and banking.
“Any V-shaped recovery may be difficult as the outbreak is not over yet… tourism might pick up this year,” Supant Mongkolsuthree, Chairman of the Federation of Thai Industries, told a news briefing.
Southeast Asia’s second-largest economy may have contracted at least 5% in the first quarter, he said. Official gross domestic product (GDP) data is due to be released on May 18.
However, the group’s 2020 GDP forecast is better than a 6.7% contraction projected by the International Monetary Fund. That would be the worst since the 1997/98 Asian financial crisis.
That is because the economy is getting support from government economic steps worth billions of dollars to mitigate the virus impact, Supant said.
The Thai central bank, which offers 500 billion baht ($15.42 billion) of soft loans to smaller businesses, said on Thursday it had lent 36 billion baht since the scheme began two weeks ago.
Thailand reported three new infections on Thursday, taking its total to 2,992. Fifty five people have died.
The government is expected to ease restrictions further later this month, which will be good for the economy, said Kalin Sarasin, Chairman of the Thai Chamber of Commerce.
The group also said its committee will study within a month whether to support a controversial proposal for Thailand to seek membership of an Asia-Pacific trade agreement to boost its economy hurt by the outbreak.
It is also suggesting the set up of a committee from the government and the private sector, including those who support or are against membership, to work on the matter.
Last week, Thailand’s cabinet shelved a decision whether Thailand should join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) due to widespread opposition.
(Additional reporting by Satawasin Staporncharnchai; Editing by Angus MacSwan)