Thailand’s Economy Contracts for First Time Since 2014 on Virus

(C) Reuters. Thailand’s Economy Contracts for First Time Since 2014 on Virus

(Bloomberg) — Thailand’s economy contracted in the first quarter for the first time since 2014 as the coronavirus outbreak cut off tourist arrivals and shuttered commerce.

Gross domestic product shrank 1.8% from a year ago, the National Economic and Social Development Council said Monday. That’s the first contraction since early 2014, according to previously published data. The median estimate in a Bloomberg survey of economists was for GDP to shrink 3.9% last quarter.

Key Insights

• Thailand’s economy is heavily reliant on tourism and trade, both of which have taken a severe knock as countries around the world imposed restrictions to contain the coronavirus outbreak. Official data shows a 74.6% plunge in foreign tourist arrivals in March from a year ago
• The government has stepped in with a stimulus package worth about 15% of GDP to help cushion the economy, which it expects will contract 5%-6% this year
• GDP fell a seasonally adjusted 2.2% in the first quarter compared with the previous three months, better than the median estimate of a 4.2% contraction in a Bloomberg survey of economists

Get More

• The Bank of Thailand is expected to cut its key interest rate by 25 basis points to 0.5% when it meets Wednesday, according to most economists surveyed by Bloomberg
• Thailand began easing some of its lockdown restrictions this weekend, with shopping malls and retail businesses reopening

(C)2020 Bloomberg L.P.