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Economist at UOB Group Barnabas Gan reviewed the latest GDO figures in Thailand.

Key Quotes

“Thailand’s economy contracted 1.8% y/y (-2.2% q/q sa) in 1Q20, marking its first contraction since 1Q14. Economic growth had been stymied by the COVID-19 led lockdowns as well as the ban on incoming passenger flights.”

“The economy’s traditional twin engines, trade and tourism, had been performing poorly in 1Q20. Official data indicated that tourist arrivals saw a plunge of 74.6% y/y, while overall exports also contracted 2.2% y/y in March 2020 alone. Gross Fixed Capital Formation (GFCF) also fell 6.5% y/y in 1Q20, suggesting that investor confidence faltered as COVID-19 concerns intensified.”

“The National Economic and Social Development Council (NESDC) is now forecasting growth to contract by between 5.0% and 6.0%, versus Bank of Thailand’s (BOT) point forecast of -5.3% y/y.”

“Notwithstanding a generous three-part stimulus package (THB2.4 trillion, 15% of GDP) as well as potential benchmark rate cuts in the year ahead, Thailand may still contract by an average of 5.4% in 2020.”