Tossaporn Sirisamphan, Secretary-General of the National Economic and Social Development Council (NESDC), announced the numbers for Gross Domestic Product (GDP) for the second quarter of 2020 today, August 17, in which that Thailand’s economy has shrunk 12.2%.
The second quarter from April to June was poisoned by the coronavirus pandemic and restriction measures which directly hit tourism, exports, and domestic activities, according to the Secretary-General.
The exports shrank 10% which heavily resulted in a significant decline in the country’s GDP while total investment and private consumption fell 8% and 6.6% respectively.
NESDC now sets a lower bar on its gross domestic product forecast for the rest of the year. It currently expects Thailand’s economy to shrink by 7.3% to 7.8% this year while the previous forecast was set at a 5% to 6% contraction.
Dr. Don Nakornthap, Senior Director of the Macroeconomic Department of the Bank of Thailand, announced that Thailand’s economy in the second quarter was the biggest contraction since the Asian financial crisis in 1997 and it would not be expected to be fully recovered until approximately 2022.
The senior director told the Associated Press: “The recent economic contraction was a result of an extended national lockdown of restriction measures to prevent the spread of COVID-19. Many economic activities had to stop operating temporarily, including international travel restrictions and there was less demand in exports of goods with trading partners. These consequently also resulted in reduced domestic economic activities, especially in people’s consumption and in private investment.
“The Thai economy should have passed its highest contraction after the second quarter. The biggest contraction in the history of Thai GDP was 12.5% during the second quarter of 1998 during the Asian financial crisis.”
“Hopefully, the national economy will shrink less and less and will eventually return to its normal growth like the time before the coronavirus outbreak. But that might not happen until 2022. However, seeing the economy starting to improve should make it more comforting despite the fact that there will be challenges in the next step.” The Senior director concluded.