Thailand has officially entered a recession after the economy contracted at the fastest rate in more than eight years.
Data reported from the first quarter period of January to March 2020 cut the forecast for the year’s gross domestic product (GDP) from expected growth of between 1.5 and 2.5 percent to a contraction of between 5 and 6 percent.
The economy shrank by 1.8 percent during the first quarter of 2020 when compared to the same period in 2019, with the worst more likely to come from second-quarter figures due to the lockdowns in place throughout April and May.
Economist at Krungthai bank, Phacharaphot Nugtramas, predicts the Thai economy could shrink by more than the official forecast, saying he expects a contraction of 8.8 percent. He expressed his concern about the second quarter, saying:
“The outbreak impact in Q2 will be much bigger than in Q1.”
Exports from Thailand are expected to drop by 8 percent this year, a stark contrast to the 1.8 percent rise predicted before the coronavirus outbreak. Tourist numbers are also expected to be heavily affected with a revised forecast of 12.7 million visitors in 2020 still very optimistic.
During the first quarter, tourist numbers were down by 38 percent in comparison to 2019. However, with the ban on incoming international flights due to last until the end of June, those figures will look far worse in second-quarter reports.
Other sectors to experience heavy hits during the first quarter were private investment which fell 5.5 percent and public investment which fell 9.3 percent.