KResearch projects that the Thai economy will grow at slow rate of only 1.8% in 2021, against prior estimate of 2.6%, because the current COVID-19 pandemic in the country is much worse than the previous one. The increased concern over the domestic COVID-19 situation has prompted consumers to adjust their behavior, and dampened their confidence, while the number of international tourist arrivals in Thailand is expected to be lower than the 2 million projected previously. However, positive factors have been taken into account, including better-than-expected export growth as the global economy has bounced back faster than anticipated, and the Thai government's economic stimulus measures, as it is expected that Thai government will steadily implement new stimulus measures under the THB1 trillion emergency decree loan as there is a leftover of roughly THB240 billion along with the THB130 billion from the mid-year budget.
An important factor that may turn the situation around is the accelerated rollout of COVID-19 vaccines. If delayed, it is likely that the pandemic will persist, and there might be another wave of COVID-19, thus hurting confidence of international tourists. Given this, optimism for the recovery in Thai tourism as an economic driver looks grim. If the COVD-19 pandemic worsens or persists into the third quarter of 2021, KResearch expects that Thailand's 2021 GDP will not grow from that reported in 2020.
In addition to broad-based vaccination program, the COVID-19 pandemic control is seen to be another urgent task. There might be a disruption in the public health system if the number of daily infections continues to surge over 1,000 cases over the coming months, resulting in incalculable hidden costs in the Thai economy. Amid the rising cost of living, normal patients have not been able to gain access to the public health system as before and this may indirectly undermine the efficiency of the workforce. Therefore, losses that may occur could be greater than the shortfalls in consumption and tourism receipts.
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