BANGKOK, Feb 11 (Reuters) – Thailand’s economy likely shrank at a slower annual pace in the final quarter of 2020 than in the previous three months, but it remained set for the deepest full-year slump in more than two decades due to the coronavirus pandemic, a Reuters poll showed.
Southeast Asia’s second-largest economy has gradually recovered since mid-2020 after coronavirus restrictions were eased, but an ongoing travel ban has kept most foreign visitors away and a recent wave of infections dealt a further blow to the nascent recovery.
The tourism-reliant economy likely contracted 5.4% in the fourth quarter from a year earlier, after a 6.4% drop in the September quarter, according to the poll.
Quarter-on-quarter, gross domestic product (GDP) likely expanded a seasonally adjusted 0.8% in the October-December quarter, after the previous period’s 6.5% growth.
The economy was expected to have contracted 6.4% in 2020, marking the worst performance since a 7.6% slump in 1998 during the Asian financial crisis.
The poll predicted growth of 2.9% this year, with analysts downgrading their forecasts due to fresh outbreaks of the virus detected in December, and Thailan’s slow vaccine procurement.
Nomura economist Charnon Boonnuch said he forecast “only a modest pickup” in GDP growth to 2.8%, despite low base effects.
“The Thai economy in the fourth quarter lost momentum as glimmers of hopes for tourism income faded,” said Kobsidthi Silpachai, head of capital markets research at Kasikornbank.
“Until vaccination is able to build herd immunity, the economy will continue to require substantial accommodation from both fiscal and monetary policy,” he said.
In November, the National Economic and Social Development Council, which compiles GDP data, forecast growth of 3.5%-4.5% this year. It will give new projections on Monday.
(Additional reporting by Satawasin Staporncharnchai Ediing by Simon Cameron-Moore)