BANGKOK (Reuters) - Thailand’s economy probably contracted the most in eight years in January-March, a Reuters poll showed on Friday, as the coronavirus outbreak hit tourism and domestic consumption.
Southeast Asia’s second-largest economy, which is heavily reliant on tourism, was forecast to have contracted 4.0% in the first quarter from a earlier, according to the poll’s median estimate from 15 economists.
That would match the rate last seen in the fourth quarter of 2011, when there was bad flooding, and compared with 1.6% growth in the previous quarter.
On a quarterly basis, gross domestic product (GDP) likely contracted a seasonally adjusted 4.5% in the March quarter, also the weakest in eight years. Growth was 0.2% in the previous quarter.
Full-year 2020 GDP was forecast to shrink 5.2%, which would be the worst since 1998, when the Asian financial crisis ravaged the country. Last year, the economy expanded 2.4%.
“Unlike earlier recessions, the COVID-19 pandemic has dealt a double whammy to Thailand’s outlook,” said Radhika Rao, economist of DBS in Singapore.
“While lockdowns impinge on domestic output and consumption, the external-oriented sectors of tourism and exports will take longer to recover given global recessionary risks,” she said.
Tourism, a key driver of the Thai economy, is taking a hit from the pandemic, which has infected more than 4 million people globally. Thailand has so far reported 3,025 cases and 56 deaths.
In January-March, foreign tourist numbers in Thailand fell 38% on year, and may plunge 65% in the whole of 2020, the Tourism Authority of Thailand has said.
The country’s exports have also been affected by manufacturing supply chain disruptions and weak global demand although first quarter figures from the central bank showed gold shipments helped to offset overall weakness.
Economic activity has been curbed by social restrictions and a partial lockdown to limit the spread of the coronavirus but some businesses have been allowed to reopen recently.
In February, the National Economic and Social Development Council, which compiles GDP data, forecast 2020 GDP growth of 1.5%-2.5% this year. It is expected to slash that on Monday.
Economists expect the central bank to cut its policy rate, already at a record low of 0.75%, at its next meeting on March 20.
To mitigate the fallout from the pandemic, the government has announced economic measures worth billions of dollars, including its latest 1.9 trillion baht ($59.23 billion) package.
Additional reporting by Satawasin Staporncharnchai in Bangkok and Shaloo Shrivastava in Bengaluru; Editing by Jacqueline Wong