Business & Economy

Thailand enters technical recession after Q2 drop in GDP

Bangkok, Aug 17 (efe-epa).- Thailand has entered technical recession after its gross domestic product (GDP) contracted by 12.2 percent in the second quarter of the year as a result of the impact of the COVID-19 pandemic.

This is the second quarter of contraction for Thailand’s GDP, which had posted a 2 percent decline in the first three months of 2020.

Exports, the main driver of Thailand’s economy, fell by 17.8 percent, according to the figures from between April and June released by the country’s Office of the National Economic and Social Development Council on Monday.

Tourism, another crucial sector of the Southeast Asian country, has also experienced a sharp contraction of 50.2 percent as a result of the closure of borders to foreign visitors.

“Export of goods and services, private consumption, and private investment declined sharply due to the outbreak of COVID-19, while public investment and government expenditure expanded and supported the economy,” the agency said in a statement.

While private consumption expenditure declined by 6.6 percent in contrast with a growth of 2.7 percent in the previous quarter, government spending increased by 1.4 percent after posting a 2.8 percent contraction between January and March.

The transportation and storage sector also decreased by 38.9 percent in the second quarter due to “the stagnant demand for transportation services particularly the air transport services,” the agency said.

The decline in Thailand’s GDP is its biggest contraction since the Asian financial crisis of 1997.

Thailand forecasts that its economy will contract between 7.3 and 7.8 percent in 2020.

The agency attributed the downward revision in the GDP from its earlier forecast in May of a contraction of between 5 and 6 percent for the year to “(i) the sharp decline in number and revenues from foreign tourist, (ii) the severe recession of global economy and merchandised trade, (iii) the impact of the pandemic, and (iv) the drought condition.”

The Thai government has approved several multi-million dollar relief packages to cushion the negative impact of the spread of coronavirus on its economy with 3,378 confirmed cases in the country since the start of the pandemic, including 58 deaths. EFE-EPA


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