Thailand’s economy faces fresh turbulence after China banned outbound group tours to try and limit the spread of the coronavirus. A virus that’s killed 52 and sickened thousands.
Chinese holidaymakers — many on group tours — spent almost $18 billion in Thailand last year. More than a quarter of all foreign tourism receipts, government data show. The industry as a whole contributes 21% to gross domestic product, according to the World Travel & Tourism Council.
Both tourism and exports were already under pressure from a surge in the Thai currency. Disarray over the annual budget is another obstacle for growth. The government has rolled out more than $10 billion of stimulus steps in the past few months to cushion the economy. Which the Bank of Thailand estimates expanded at the weakest pace in five years in 2019.
“The outbreak of coronavirus is a risk,” Tim Leelahaphan, a Standard Chartered Bank economist in Bangkok, says. “The strong Thai baht is also affecting tourism growth. That is unlikely to help an already-slowing economy.”
The new coronavirus originated in China, where dozens have died from the illness. A number of nations have diagnosed the infection in travelers from China. Cases in Thailand has already had 5 cases of the virus.
China’s prohibition on outbound group tours takes effect Monday. The ban will above all spell pain for Thailand’s Tourism & Leisure equity index. The gauge slumped more than 6% last week, making it the third-worst performing industry group on the stock exchange.