BANGKOK (Reuters) – Thailand’s economy shrank in the first quarter and a deeper contraction is expected in the second quarter as the coronavirus outbreak severely hits global demand and domestic activity, the central bank said on Thursday.
Southeast Asia’s second-largest economy is heavily reliant on exports and tourism. But tourist numbers tumbled 38% in January-March from a year earlier, while exports excluding gold dropped 3.1%, central bank data showed.
“We will see the economy contracting in the first quarter with deeper shrinkage in the second quarter,” Don Nakornthab, a senior director at the Bank of Thailand (BOT), told a briefing. He did not give specific forecasts.
First-quarter GDP data is due to be released on May 18, by the state planning agency.
The BOT will monitor the tourist situation and the effect of new government economic measures, Don said.
“There is a little chance of L-shaped (recovery),” he said.
“But whether it will be U-shaped or V-shaped” will depend on how fast tourism recovers and on the global economy, he added.
Last month, the BOT predicted Thailand’s economy would contract 5.3% this year, the worst performance since 1998, when the Asian financial crisis ravaged the country.
Don said recent strength in the baht <THB=TH> is unlikely to be sustained as tourist numbers will not recover fast.
In a bid to mitigate the virus impact, the government has announced a series of economic measures worth billions of dollars, including its latest 1.9 trillion baht ($58.71 billion) package.
Earlier on Thursday, Deputy Prime Minister Somkid Jatusripitak said exports and tourism are expected to slow until early next year due to the pandemic.
“The impact started to be felt in the first quarter, but in the second quarter, the economy is clearly stagnating,” he said.
The government will seek cabinet approval by mid-May on spending some 400 billion baht under the latest economic package to ease the outbreak impact, Somkid said.
Thailand has a total of 2,954 cases with 54 deaths since the outbreak emerged in January. The country will start reopening some businesses on Sunday.
(Reporting by Kitiphong Thaichareon, Orathai Sriring and Satawasin Staporncharnchai; Editing by Raju Gopalakrishnan)