Thailand’s economic growth is likely to fall 7.8%, the biggest projected drop in the Asean, due to the impact of Covid-19 on the tourism and service sectors, according to the Asean+3 Macroeconomic Research Office (Amro).
Hoe Ee Khor, Amro’s chief economist, said in his group’s forecast that Asean economic growth could drop from 4.6% to -2.6% due to the impact of the pandemic. For Asean and its +3 partners — China, Japan, and South Korea — the average growth could drop from 4.8% last year to 0% this year, Mr Khor said.
“Many countries are slipping into recession, depending on their economic structures and how successful they were in containing the virus.” he said. “But even with the most successful countries, like Thailand, we estimate negative growth of 7.8% because its economy depends on tourism and services, which were hit very badly.”
Mr Khor was speaking during a virtual media briefing called “The 2020 Asean+3 Regional Economic Outlook”.
He said the region was facing its sharpest economic contraction since the Asian financial crisis of 1997 but the 10-member bloc could rebound and even grow at 5.7% in 2021 if it found a way to control the outbreak this year.
He noted that if Asean+3 quickly controlled the outbreak, they could grow by as much as 6% next year.
Economic Growth affected by second wave
Asked about the second half of this year, Li Lian Ong, acting group head for regional surveillance at Amro, said while many countries had managed to flatten the infection curve, some were experiencing a second wave of infections and this was creating a sense of uncertainty.
Mr Khor explained these included recurring outbreaks and financial crises amid the pandemic and ongoing US-China tensions, which could last for two years.
Turning to rebuilding manufacturing sectors, Mr Khor said the best way to minimize supply chain disruptions was to diversify and become more resilient.
“If one of the sources is hit, [there should be] other sources of supplies,” he said. “Singapore is a very good example because it doesn’t produce any food, but imports from other countries in the region.”
Mr Khor felt Asean economies had the potential to enjoy the fastest growth in the world and rising middle-class populations.
Source: Bangkok Post