Real-time news updates: Thailand’s economy returns to contraction after Covid-19 outbreaks

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Thailand’s economy shrank in the three months to September 30, after the Covid-19 outbreaks led to trade blockades across the country, including Bangkok, dampening tourism and other service activities.

Quarterly gross domestic product fell 0.3% year-on-year, according to figures released Monday by the National Council’s Office for Economic and Social Development.

The NESDC, the economic planning agency, said private consumption and public investment declined while exports, private investment and government spending continued to rise.

Domestic tourism revenue fell 91.5%, compared with an 86% increase in the previous quarter. The average hotel occupancy rate stood at 5.4 percent, down from 8.2 percent in the previous quarter.

“While the economy is expected to recover strongly in the fourth quarter, the speed of the recovery beyond the end of the year will depend on how quickly foreign tourists return to the country,” said Gareth Leather, senior Asian economist at Capital Economics.

The Covid-19 Delta strain emerged in Thailand in June, and new daily cases rapidly increased from around 3,000 in July to over 20,000 in August.

The government has imposed strict lockdown measures such as banning eating in restaurants and limiting the opening hours of markets and convenience stores. A curfew has been established from 9:00 pm to 4:00 am.

The accommodation and restaurant services sector contracted by 18.7 percent, compared with an expansion of 14.6 percent in the previous quarter.

The contraction in GDP was in line with market expectations. As of Friday, 12 out of 13 economists surveyed predicted negative growth for the quarter, according to a Reuters poll.

Thailand has reported 7,000-8,000 new cases of Covid-19 every day in recent weeks. However, the government has abandoned its eradication policy, allowing companies to return to normal even with a large number of cases.

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