For decades, East Asia and the Pacific region sustained rapid economic growth while lifting hundreds…
BANGKOK, July 15, 2021 – Thailand’s economy continues to take a heavy toll due to the COVID-19 pandemic and is projected to expand modestly at 2.2 percent in 2021, revised down from the 3.4 percent growth projected in March, according to the World Bank’s latest Thailand Economic Monitor “The Road to Recovery” published today.
Continued assistance to the poor and vulnerable, including informal workers, will be necessary as COVID-19 continues to impact Thailand’s economy.
The weaker outlook reflects the impact of the ongoing third wave of the virus on private consumption, and the likelihood that international tourist arrivals will remain very low through the end of 2021.
Thailand recorded 40 million tourist arrivals in 2019, but the expected number of tourist arrivals in 2021 has been revised sharply downward from a previous forecast of 4-5 million to just 0.6 million.
“The economic shock associated with COVID-19 has adversely affected employment, incomes, and poverty, but the government’s comprehensive social protection response has been impressive in mitigating its impact,”
Birgit Hansl, World Bank Country Manager for Thailand
“Thailand’s fiscal space is still sufficient to allow supporting measures to protect the poor and most in need in the months to come.”
Thailand has performed relatively well in terms of the scale and speed of its fiscal response
The government expanded what was previously a relatively modest set of cash transfer programs to implement one of the largest such responses to COVID-19 in the world.
Preliminary simulations suggest that more than 780,000 additional people could have fallen into poverty in 2020 if the government had not scaled up social assistance.
“The crisis in 2020 demonstrated Thailand’s ability to leverage its robust and universal digital ID, sophisticated and interoperable digital platform, and a number of administrative databases to filter eligibility for new cash transfer programs. Going forward Thailand would need to consolidate these efforts and be better prepared to respond to crisis through setting up a social registry.” said Francesca Lamanna, Senior Economist at the World Bank.
Recovery might be delayed due to new COVID-19 variants
Economic activity is not expected to return to its pre-pandemic levels until 2022, with the GDP growth rate projected to rise to 5.1 percent. However, the pace of recovery will depend on Thailand’s vaccination progress, the effectiveness of fiscal support, and the extent to which international tourism resumes.
Exports of goods are expected to support the Thai economy in 2021, due to recovering global demand for automotive parts, electronics,…