Thailand's economy shrinks most in more than 20 years amid COVID-19 pandemic

According to data by Thai authorities, which shows Thailand's economy suffered its worst decline since the Asian financial crisis more than two decades ago. One of the main reasons cited behind this contraction is the shattered tourism sector because of the coronavirus pandemic. The Southeast Asian country escaped the worst of the infection - registering 3,300 cases and 58 deaths despite being the first country outside China to register an infection in January.

As per the Office of National Economic and Social Development Council (NESDC), the economy shrank 12.2 per cent in the second quarter because of pandemic spurred lockdown, which brought the economy to a staggering halt. According to media reports, Secretary-General of NESDC Thosaporn Sirisumphand said the outbreak has made our economy fall by 12.2 per cent, lower than during the Tom Yum Kung crisis of 1998.

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According to estimates around 40 million tourists were expected to arrive in Thailand this year, but unfortunately, the travel industry was badly hit when pandemic lockdowns went into effect globally in the month of March.  According to NESDC, the absence of tourists affected the country's other sectors like entertainment, retail, hotels, and restaurants. Last week Thai bank Krungsri said in a note that the tourism sector will remain week due to near-zero foreign tourists and lower domestic purchasing power.

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Exports Plunged 

Exports plunged 28% from a year earlier, while service exports, which include international travel, cratered by nearly 38%. On a seasonally adjusted, quarterly basis, the Thai economy contracted 9.7% from the January-March quarter, when it shrank 2.5%. It also logged a contraction in the last quarter of 2019, minus 0.3%, and thus has been in recession this year. The economy is faring about as poorly as those of Thailand's neighbors. Last week, Malaysia reported a 13.2% contraction in its economy in the last quarter. Singapore's economy shrank 13.2% and the Philippines' 16.5%.

(Image Source: AP/With inputs from agency)

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