Sluggish vaccine campaign threatens Thailand’s economic recovery

The Bank of Thailand (BoT) slashed again Thailand’s economic growth forecast for 2021 for the second time this year targeting a mere 1 to 2% growth, depending mainly on the procurement and distribution of Covid-19 vaccines.

The central bank’s previous estimate of GDP’s growth was set at 3% before the beginning of the third wave of Covid-19 in April, but it now includes three different scenarios targeting between 1 and 2% growth depending on the country’s vaccination drive.

The Thai economy would expand at a much lower rate due to the third wave of the outbreak which affected domestic spending. In addition, the recovery of foreign tourist figures would be affected by the longer-than-expected delay in the re-opening of the country and the uncertain international travel restriction measures. 

Bank of Thailand press release MAY 5, 2021

For the base scenario, the bank predicts a GDP growth of 2%, assuming that vaccine procurement and distribution reaches 100 million doses this year and leads to herd immunity in the first quarter of 2022.

Worst case scenario could drag down Thailand’s growth to 1%

But if the vaccine rollout sinks down to only 60+ millions, than Thailand’s growth could tank to only 1%, leaving the country with less than a million tourist.

Last week the Finance Ministry has also reduced its 2021 economic growth forecast for a second time to 2.3% from 2.8% growth, after a third wave of coronavirus infections struck Thailand this month, slashing its forecast for the number of foreign tourists to only 2 million this year from 5 million it had predicted three months ago.

Business leaders are now openly criticising Thailand’s slow pace in vaccination compared with its Southeast Asian neighbours. A recent assessment by The Economist placed Thailand 124th out of 154 countries in the percentage of adults who had received the first dose of a vaccine.

William Heinecke, founder and chairman of Minor International, a major hotel and restaurant operator in Thailand said “We will lose tourism trade to Vietnam, Hong Kong and Singapore because they have more efficient vaccination programs.” according to a Nikkei report.

Thailand is now lagging behind many countries in vaccine procurement, including most of ASEAN.

“The Thai government has no excuses as other countries have bet on many vaccine brands and are now proving they can manage risks much better than Thailand,”

Pipat Luengnaruemitchai, chief economist at Kiatnakin Phatra Securities

“This suggests the government has failed in crisis management by depending too much on one vaccine brand, AstraZeneca, and one production plant in Thailand,” said Pipat Luengnaruemitchai, chief economist at Kiatnakin…

Source link : Sluggish vaccine campaign threatens Thailand’s economic recovery by Olivier Languepin

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