Thailand's Economy Faces An Uphill Battle

Before the pandemic, Thailand was considered one of ASEAN’s success stories. It was the No. 2 economy in Southeast Asia; had a strong manufacturing sector; and was a favourite among foreign investors.

- Jennifer Lee

Even when the COVID-19 pandemic hit, Thailand’s low case numbers won praise from global health experts. The country had everything under control to meet a 2022 reopening or earlier.

Now, all that has reversed. Thailand’s economy faces a triple whammy of a devastated tourism sector, a sputtering consumption engine and excessive household debt. Worse still, for an economy that’s reliant on tourism – COVID-19 case numbers are spiking in a fourth wave that has swept Southeast Asia.

A LATE START Much of the Asia-Pacific region is gearing up for a 2022 reopening and recovery cycle. In China, where the pandemic is largely contained through tough testing and quarantine measures, things are almost back to normal. In the United States, states are lifting mask mandates as more and more people are vaccinated.

On the other hand, Thailand is gearing for a 2023 reopening – losing a year of productivity. This timeline does not come from overseas doomsayers, but Bank of Thailand Governor Sethaput Suthiwartnarueput, who has access to more data than anyone else.

The figures aren’t hopeful either. Thailand’s GDP in 2020 registered a contraction of 6.1 percent, the worst since the 7.6 percent decline in the 1997 Asian financial crisis. The 2021 first-quarter GDP figures continue the slump, registering a 2.6 percent shrinkage from a year earlier according to the National Economic and Social Development Council.