Thailand’s think tank Krungsri Research on Wednesday maintains its 2021 GDP forecast for the country’s economic growth at 2.8% amid weak confidence and several domestic and international challenges.
The private research center said that even though the Thai economy has shown positive signs, as indicated by a better-than-expected GDP figure in 1Q22 that grew by 1.1 percent QoQ and 2.2 percent YoY, the economy still faces many risks and headwinds, including a prolonged conflict in Ukraine, China’s economic slowdown amid strict COVID-19 lockdowns that would impact Thai exports and cause supply chain disruption, and inflationary pressures that seems to dilute domestic purchasing power.
The Office of the National Economic and Social Development Council, however, has slashed its economic growth prediction for this year from 3.5-4.5 percent to 2.5-3.5 percent, and raised its inflation forecast from a previous projection of 1.5-2.5 percent to 4.2-5.2 percent, respectively.
Meanwhile, consumer confidence remains no signs of recovery, with next 6-month expectations falling to a 7-month low of 48.0. This recent data suggests that domestic demand is likely to continue to weaken from rising commodity prices, especially oil prices.
Nevertheless, there would be some positive factors that may support spending and restore confidence in the next period, such as the government gradually lifting of COVID-19 restrictions, to help recover Thailand’s economy. And government is preparing to launch phase 4 of the We Travel Together scheme.
